UNICEF Innocenti Report Card 12 Children in the Developed World

Children of the Recession The impact of the economic crisis on child well-being in rich countries Innocenti Report Card 12 was written by Gonzalo Fanjul and edited by Rick Boychuk. The UNICEF Office of Research – Innocenti would like to acknowledge the generous support for Innocenti Report Card 12 provided by the Government of Italy. Any part of this Innocenti Report Card may be freely reproduced using the following reference: UNICEF Office of Research (2014). ‘Children of the Recession: The impact of the economic crisis on child well-being in rich countries’, Innocenti Report Card 12, UNICEF Office of Research, Florence.

The Report Card series is designed to monitor and compare the performance of economically advanced countries in securing the rights and well-being of their children.

In 1988 the United Nations Children’s Fund (UNICEF) established a research centre to support its advocacy for children worldwide and to identify and research current and future areas of UNICEF’s work. The prime objectives of the Office of Research are to improve international understanding of issues relating to children’s rights, to help facilitate full implementation of the Convention on the Rights of the Child supporting advocacy worldwide. The Office aims to set out a comprehensive framework for research and knowledge within the organization, in support of its global programmes and policies. Through strengthening research partnerships with leading academic institutions and development networks in both the North and South, the Office seeks to leverage additional resources and influence in support of efforts towards policy reform in favour of children. Publications produced by the Office are contributions to a global debate on children and child rights issues and include a wide range of opinions. For that reason, some publications may not necessarily reflect UNICEF policies or approaches on some topics. The views expressed are those of the authors and/or editors and are published in order to stimulate further dialogue on issues affecting children.

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UNICEF Office of Research – Innocenti Piazza SS. Annunziata, 12 50122 Florence, Italy Tel: +39 055 2033 0 Fax: +39 055 2033 220 fl[email protected] www.unicef-irc.org Innocenti Report Card 12 Children in the Developed World

Children of the Recession The impact of the economic crisis on child well-being in rich countries CHILDREN OF THE RECESSION EXECUTIVE SUMMARY

The data and observations in this below the poverty line) has Universal aftershocks Innocenti Report Card reveal a increased since 2008. In 18 Those countries most affected by strong and multifaceted relationship countries child poverty has fallen, the recession have seen a steady between the impact of the Great sometimes markedly. deterioration in the situation of Recession on national economies » The number of children entering families, mostly from job losses, and a decline in children’s well-being into poverty during the recession underemployment and cuts to since 2008. Children are suffering is 2.6 million higher than the public services. The median income most, and will bear the number that have been able to in households with children has consequences longest, in countries escape from it since 2008 decreased in almost half of the where the recession has hit hardest. (6.6 million, as against 4 million). countries with available data. The For each country, the extent and Around 76.5 million children live number of families stating that their character of the crisis’s impact on in poverty in the 41 most affluent situation is ‘very difficult’ has risen children has been shaped by the countries. in most countries. Having a child or depth of the recession, pre-existing children in a household increases » The recession has hit young economic conditions, the strength the risk of ‘working poverty’ people extremely hard, with the of the social safety net and, most (working, but below the poverty NEET (not in education, importantly, policy responses. line) from 7 per cent to 11 per cent. employment or training) rate Remarkably, amid this Since 2008, the percentage of rising dramatically in many unprecedented social crisis, many households with children that are countries. In the EU, 7.5 million countries have managed to limit – unable to afford meat, chicken or young people (almost the or even reduce – child poverty. It fish every second day has more population of Switzerland) were was by no means inevitable, then, than doubled in Estonia, Greece NEET in 2013 – nearly a million that children would be the most and Italy. Inability to cope with more than in 2008. The United enduring victims of the recession. unexpected financial expenses has States and Australia have had the increased by almost 60 per cent, on The impact of the recession largest increases in the NEET rate average, in households with on children across non-EU OECD countries. children in the This report offers multiple and » Beyond income and employment 12 most affected countries. detailed perspectives on how the levels, the recession has affected Such changes have huge recession has affected children in a number of other important consequences for the young. the developed world. Official data dimensions of people’s lives. From Children feel anxious and stressed have been used to rank the impact 2007 to 2013, feelings of insecurity when parents endure on children for countries in the and stress rose in 18 of the 41 unemployment or income loss, and European Union (EU) and/or the countries, according to measurable they suffer family downturns in Organisation for Economic self-perception indicators subtle and painfully evident ways. Co-operation and Development (including access to food and Housing, a large part of every (OECD): satisfaction with life). The family’s budget, is one important » In 23 of 41 countries analysed, recession’s impact on personal indicator of poverty. Evictions, and in many of the highly experiences and perceptions is mortgage defaults and foreclosures populated countries, child not yet over, and many indicators all spiked in many countries poverty (children living in have even worsened in the most affected by the recession. Such households whose income is recent years. constraints at home have been

2 INNOCENTI REPORT CARD 12 EXECUTIVE SUMMARY

compounded by weakened safety increased more rapidly (or has from financial markets forced many nets in healthcare, education and decreased more slowly) for the governments to cut budgets. The nutrition. Some 1.6 million more young than for the elderly. In 24 of Eurozone’s U-turn was particularly children were living in severe the 31 countries, poverty levels abrupt, and there was a fall in social material deprivation in 2012 have decreased among the elderly, spending on children and families. (11.1 million) than in 2008 while among children they have Social protection responses have (9.5 million) in 30 European increased in 20 countries, varied considerably in magnitude countries. The longer these children suggesting that safeguards for the and makeup. When budget cuts remain trapped in the cycle of old have been more effective than became unavoidable in certain poverty, the harder it will be for for the young. countries, particularly in the them to escape. A generation cast aside Mediterranean region, the shift from Poorer children suffer most Unemployment among adolescents stimulus to consolidation increased The poorest and most vulnerable and young adults is a significant inequality and contributed to children have suffered long-term effect of the recession. worsening living conditions for disproportionately. Inequality has Among those aged 15–24, children. During the second phase increased in some countries where unemployment has increased in 34 of the recession, the effectiveness overall child poverty has decreased, of the 41 countries analysed. Youth of child poverty reduction efforts suggesting that tax changes and unemployment and declined in a third of EU countries. social transfers intended to help the underemployment have reached Extreme child poverty in the United poorest children have been worrying levels in many countries. States increased more during the relatively ineffective. Great Recession than it did in the Even when unemployment or The ‘poverty gap’ (a measure of the recession of 1982, suggesting that, inactivity decreases, that does not distance between the poverty line for the very poorest, the safety net necessarily mean that young people and the income of people below it) affords less protection now than it are finding stable, reasonably paid has worsened in countries where did three decades ago. jobs. The number of 15- to 24-year- poverty has increased most, olds in part-time work or who are No government was prepared for meaning that deprivation in those underemployed has tripled on the extent or depth of the recession countries is more extensive and average in countries more exposed and none reacted in the same way. intense. It is notable that this to the recession. Contract work has Many countries with higher levels inequality has also increased in become more common, of child vulnerability would have some places where overall child contributing to the general been wise to strengthen their safety poverty has decreased. Moreover, precariousness of labour markets. nets during the pre-recession period children in particularly vulnerable of dynamic economic growth, situations – such as those in An uneven response which was marked by rising jobless, migrant, lone-parent and Many governments adopted disparity and a growing large households – are over- economic stimulus packages in the concentration of wealth. represented in the most severe initial phase of the recession, Governments that bolstered existing ranges of poverty statistics. pushing up public spending. The public institutions and programmes In 28 out of 31 European countries persistence of the recession led to helped to buffer countless children (EU plus Iceland, Norway and a decrease in national revenues and from the crisis – a strategy that Switzerland) the poverty rate has an increase in deficits. Pressure others may consider adopting.

INNOCENTI REPORT CARD 12 3 EXECUTIVE SUMMARY

The consequences of a Great The problems have not ended for » Make an explicit commitment to Leap Backward children and their families, and it end child poverty in developed All countries faced difficult choices, may well take years for many of countries. Countries should limited budgets and worsening them to return to pre-crisis levels of place the well-being of children recessions. The enormity of the well-being. Failing to respond boldly at the top of their responses to challenges should not be could pose long-term risks – for the recession, aligning their underestimated. Demand for example, there has been a break in ethical obligations with their austerity measures was intense, the upwards trend in fertility rates. self-interest. In no region are these risks more as were pleas from other vulnerable » Rescue, prevent and give hope. problematic than in Europe, where sectors. Compromises were Opportunities to break cycles of inequality is rising within and undoubtedly necessary. child vulnerability should be between Member States, promoted. Guaranteed minimum But if protection policies had been threatening to undermine the social standards would make a stronger before, and if they had ambitious targets of Europe’s positive difference. been strengthened during the 2020 agenda. recession, how many more children » Produce better data for informed The children of the recovery could have been helped? public debate. Availability, What lies ahead for children A calculation of the impact of the timeliness and relevance of neglected by the global response crisis on the median income of information about the well-being to the Great Recession? If the households with children suggests of children should be improved. neglect persists, the crisis among that, between 2008 and 2012, children will continue well after Greek families lost the equivalent any economic recovery. The long- of 14 years of progress; Ireland, term well-being of our societies Luxembourg and Spain lost a full is at stake. decade; and four other nations lost almost as much. The Great The analysis in this report suggests Recession has brought suffering the following principles and and life-long risks to an extra recommendations for governments 619,000 children in Italy, 444,000 to consider in strengthening child in France and 2 million in Mexico. protection strategies:

4 INNOCENTI REPORT CARD 12 SECTION 1 INTRODUCTION

“The child should be fully prepared to live an individual life in society, and brought up in the spirit of the ideals proclaimed in the Charter of the United Nations, and in particular in the spirit of peace, dignity, tolerance, freedom, equality and solidarity.” – Convention on the Rights of the Child, 1989

Twenty-five years after the As the data in this new edition of To be sure, the situation described Convention on the Rights of the Child the Innocenti Report Card series here varies from country to became international law, many of its show, in the past five years, rising country. A small but significant commitments remain unrealized, and numbers of children and their group of countries responded to the developed countries most families have experienced difficulty the crisis with ambitious and capable of delivering on them are in satisfying their most basic timely plans that have sheltered losing ground. The Great Recession, material and educational needs. children from the recession’s which was triggered by a financial Unemployment rates not seen since most debilitating consequences. meltdown that started in the United the Great Depression of the 1930s Many others have implemented States and spread rapidly across the have left many families unable to partial reforms to safeguard such globe, has inflicted the economic provide the care, protection and essentials as health services, crisis on children. The gap between opportunities to which children are housing and food. In some cases, rich and poor families has widened in entitled. Most importantly, the the honest efforts of governments an alarming number of industrialized Great Recession is about to trap have been hindered by the weight countries. For many of these a generation of educated and of the conditions imposed on children, once again place of birth capable youth in a limbo of them by the financial markets may determine their rights and unmet expectations and lasting and the providers of financial opportunities in life. vulnerability. assistance.

INNOCENTI REPORT CARD 12 5 SECTION 1 INTRODUCTION

This report is not intended to levels of children; the impact of the recommend specific responses to recession on youth; and what the economic downturn or to repeated rounds of the Gallup comment on the austerity policies World Poll show about the change that some countries are pursuing. in people’s perceptions of their life Rather, its goal is to highlight the circumstances over the past five fact that the current and future lives years. Section 3 describes the of children have been – and are impact of the Great Recession on being – neglected in the global families, analysing the magnitude of response to the Great Recession. the shock on children and Should this neglect persist, the comparing it with the condition of crisis for children will continue other social groups. It also explores to be felt well after the economic the effects of the recession on recovery. The long-term social youth seeking to enter or remain in health of our societies is at risk. If the labour force in the middle of a generations have defining moments, recession. Section 4 offers an this is certainly one of them. explanation for why this happened, looking at the period that preceded The structure of the report is as the crisis and describing the follows: Section 2 features ‘league responses of different tables’, the flagship tool of the governments. Section 5 presents Innocenti Report Card series. The conclusions and recommendations. tables rank the change, since the onset of the crisis, in the poverty

6 INNOCENTI REPORT CARD 12 SECTION 2 THE LEAGUE TABLES

SECTION 2 THE LEAGUE TABLES

Countries should place the well-being of children at the top of their responses to the recession. Not only is this a moral obligation but it is in the self-interest of societies.

Surveys and polls produced in the a complex concept – how children The rankings focus on 2007/2008 European Union (EU) and/or the have fared during the Great up to the latest period for which Organisation for Economic Recession. The first covers data are available. A light blue Co-operation and Development monetary poverty, a measure of the background indicates a place in (OECD) countries offer valuable availability of resources to purchase the top third of the table, mid insights into the impact of the goods and services to ensure blue denotes the middle third, recession on children and families. material well-being. The second and dark blue the bottom third. Using such data, three important ranking reports on the schooling While some macroeconomic rankings have been constructed: and employment status of young indicators in most affluent the evolution of child poverty by adults, who have arguably been the countries show signs of recovery, country since 2008; the change in hardest hit during this period. And economic growth is slow and the rate of young people not in our third league table is somewhat unemployment remains education, employment or training innovative, employing data from abnormally high. The impact of (NEET); and individuals’ self- the Gallup World Poll to see what the recession on children, in perception of their living conditions. individuals themselves say about particular, will be felt long after Each of these league tables their experiences during these the recession itself is declared describes a different dimension of tumultuous economic times. to be over.

INNOCENTI REPORT CARD 12 7 SECTION 2 THE LEAGUE TABLES

League Table 1 Change in child poverty (anchored in 2008)

Change Rank Country (2008–2012) 31.4 1 Chile -8.67 Chile 22.8 22.4 2 Poland -7.90 Poland 14.5 19.2 3 Australia -6.27 Australia 13.0 16.7 4 Slovakia -5.60 Slovakia 11.1 19.5 5 Switzerland -4.80 Switzerland 14.7 9.6 6 Norway -4.30 Norway 5.3 16.8 7 Republic of Korea -3.40 Republic of Korea 13.4 12.0 8 Finland -3.20 Finland 8.8 33.0 9 Turkey -2.76 Turkey 30.2 21.7 10 Japan -2.70 Japan 19.0 23.2 11 Canada -2.44 Canada 20.8 32.9 12 Romania -2.30 Romania 30.6 17.2 13 Belgium -0.80 Belgium 16.4 12.9 13 Sweden -0.80 Sweden 12.1 14.9 15 Austria -0.70 Austria 14.2 18.8 16 New Zealand -0.40 New Zealand 18.4 13.2 17 Czech Republic -0.40 Czech Republic 12.8 15.2 18 Germany -0.20 Germany 15.0 35.1 19 Israel 0.55 Israel 35.6 25.5 20 Bulgaria 0.60 Bulgaria 26.1 20.4 20 Malta 0.60 Malta 21.0 12.9 22 Netherlands 1.00 Netherlands 13.9 22.8 22 Portugal 1.00 Portugal 23.8 9.1 24 Denmark 1.10 Denmark 10.2 24.0 25 United Kingdom 1.60 United Kingdom 25.6 11.6 26 Slovenia 1.80 Slovenia 13.4 30.1 27 United States 2.06 United States 32.2 14.0 28 Cyprus 2.70 Cyprus 16.7 19.7 29 Hungary 2.90 Hungary 22.6 15.6 30 France 3.00 France 18.6 29.3 31 Mexico 5.00 Mexico 34.3 17.1 32 Estonia 5.10 Estonia 22.2 24.7 33 Italy 5.70 Italy 30.4 19.8 34 Luxembourg 6.50 Luxembourg 26.3 28.2 35 Spain 8.10 Spain 36.3 22.8 36 Lithuania 8.30 Lithuania 31.1 18.0 37 Ireland 10.60 Ireland 28.6 15.8 38 Croatia 11.80 Croatia 27.6 23.6 39 Latvia 14.60 Latvia 38.2 23.0 40 Greece 17.50 Greece 40.5 11.2 41 Iceland 20.40 Iceland 31.6

0 10 20 30 40 50

Child poverty rate

2008 2012 See data sources and notes on page 44.

8 INNOCENTI REPORT CARD 12 SECTION 2 THE LEAGUE TABLES

A commonly used indicator of child Key findings: and three other states that have poverty is the proportion of those been hard hit by the recession: » The impact of the recession can living below an established poverty Iceland, Ireland and Luxembourg. be felt in more than half of the 41 line. League Table 1 ranks the In the five countries at the countries (and in most of the change in child poverty in 41 EU bottom of the table, child poverty highly populated countries) listed and/or OECD countries between rose by 10 to 20 points – an in League Table 1. In 23 2008 and 2012. This change is increase of over 50 per cent. countries, the income poverty of calculated by computing child children has increased since » In a remarkable group of poverty in 2008 using a poverty line 2008, with wide variations among 18 countries, families and fixed at 60 per cent of median countries (from 0.55 percentage governments found some income. Using the same poverty line points in Israel to 20.40 way to cope with the worst in 2012, adjusted for inflation, the percentage points in Iceland). consequences of the recession rate is computed and the difference and saw their child poverty in the two rates is shown. A positive » The largest increase in child numbers reduced. This is the number indicates an increase in poverty has been in southern case in Chile, Finland, Norway, child poverty. Additional European countries – Greece, Poland and Slovakia, all of which explanations of these trends are Italy and Spain – as well as in reduced poverty levels by some provided in Section 3. Croatia, the three Baltic States 30 per cent. » The number of children entering Interpreting the data – League Table 1 into poverty during the recession is 2.6 million higher than the number that have been able to escape it since 2008 (6.6 million, versus 4 million). Around 76.5 million children live in poverty in the 41 most affluent countries. » In a surprisingly high number of cases, average comparisons hide Poverty in affluent countries is usually measured using a relative the scale of the situation. In over poverty line defined at either 50 per cent or 60 per cent of median half of the countries, more than annual income. Using this approach, changes in poverty over time one child in five lives in poverty. reflect changes in income and changes in the distribution of income. Greece, Latvia and Spain have This report, however, uses a fixed reference point, anchored to the child poverty of above 36 per relative poverty line in 2008, as a benchmark against which to cent. In the United States, child assess the absolute change in child poverty over time. This measure poverty is 32 per cent, and in is particularly useful for assessing impacts of the recession, when Italy it is 30 per cent. incomes of the entire population may be changing, and when individuals compare their income to that of their neighbours, as well as to their own circumstances before the crisis. Using a relative poverty line each year obscures the impact on poverty of the overall decline in median income. In the United Kingdom, for example, relative child poverty decreased from 24 per cent in 2008 to 18.6 per cent in 2012 due to a sharp decline in median income and the subsequent lowering of the relative poverty line. Using the anchored indicator, it actually increased from 24.0 per cent to 25.6 per cent from the start of the recession.

INNOCENTI REPORT CARD 12 9 SECTION 2 THE LEAGUE TABLES

League Table 2 Youth aged 15 to 24 not in education, employment or training (NEET), percentage

Change Rank Country (2008–2013) 37.0 1 Turkey -11.5 Turkey 25.5 8.4 2 Germany -2.1 Germany 6.3 8.5 3 Japan -1.5 Japan 6.9 6.2 4 Luxembourg -1.2 Luxembourg 5.0 21.5 5 Mexico -0.4 Mexico 21.1 7.8 6 Sweden -0.3 Sweden 7.5 7.1 7 Austria 0.0 Austria 7.1 9.6 7 Canada 0.0 Canada 9.6 12.9 9 New Zealand 0.8 New Zealand 13.7 6.3 10 Switzerland 0.8 Switzerland 7.1 29.8 11 Israel 0.9 Israel 30.7 10.2 12 France 1.0 France 11.2 4.5 12 Iceland 1.0 Iceland 5.5 14.9 14 Ireland 1.2 Ireland 16.1 11.8 14 Latvia 1.2 Latvia 13.0 14.6 14 Republic of Korea 1.2 Republic of Korea 15.8 12.1 14 United Kingdom 1.2 United Kingdom 13.3 19.0 18 Chile 1.5 Chile 20.5 7.8 18 Finland 1.5 Finland 9.3 4.1 18 Norway 1.5 Norway 5.6 4.3 21 Denmark 1.7 Denmark 6.0 8.3 21 Malta 1.7 Malta 10.0 3.4 21 Netherlands 1.7 Netherlands 5.1 9.9 24 Australia 2.3 Australia 12.2 8.8 25 Lithuania 2.3 Lithuania 11.1 6.7 26 Czech Republic 2.4 Czech Republic 9.1 10.1 27 Belgium 2.6 Belgium 12.7 8.7 27 Estonia 2.6 Estonia 11.3 11.1 27 Slovakia 2.6 Slovakia 13.7 6.5 30 Slovenia 2.7 Slovenia 9.2 12.0 31 United States 3.0 United States 15.0 9.0 32 Poland 3.2 Poland 12.2 11.5 33 Hungary 3.9 Hungary 15.4 10.3 33 Portugal 3.9 Portugal 14.2 17.4 35 Bulgaria 4.2 Bulgaria 21.6 14.3 36 Spain 4.3 Spain 18.6 16.6 37 Italy 5.6 Italy 22.2 11.6 37 Romania 5.6 Romania 17.2 10.1 39 Croatia 8.5 Croatia 18.6 11.7 40 Greece 8.9 Greece 20.6 9.7 41 Cyprus 9.0 Cyprus 18.7

0 10 20 30 40

NEET rate (%)

2008 2013 See data sources and notes on page 44.

10 INNOCENTI REPORT CARD 12 SECTION 2 THE LEAGUE TABLES

The NEET rate is the percentage of » Of the OECD countries that are » In countries such as Croatia and young people aged 15 to 24 who not in the European Union, the Greece, the deterioration in the are not participating in education, United States saw the largest circumstances of youth went employment or training. League increase in the NEET rate, hand in hand with an increase in Table 2 shows the NEET ranking of followed by Australia. child poverty, but there does not the 41 countries between 2008 appear to be a strong relationship » Across all the countries, the and 2013. between the two. Iceland sharpest NEET rate decrease was mitigated a rise in the NEET rate Key findings: in Turkey. Even so, that country despite a dramatic increase in retained the highest rate in the » The recession hit young people child poverty, while Romania saw comparison: one young person in extremely hard, with the NEET the NEET rate rise even as child four was NEET in 2013. Similarly rate rising dramatically in most poverty fell. EU countries. The largest in Mexico, though the NEET rate absolute increases were in has remained stable, one young Croatia, Cyprus, Greece, Italy person in five was NEET. and Romania, all with relative » Generally speaking, young people changes of around 30 per cent have suffered more in countries or higher. that have seen a greater decline » Across the EU, 7.5 million young in economic output. The two people (almost the entire notable exceptions are population of Switzerland) were Luxembourg (where the NEET NEET in 2013, nearly a million rate fell during a specific period more than in 2008. In Italy alone, of economic turbulence) and more than a million young Poland (where the NEET rate people aged 15–24 were neither increased, despite sustained studying nor working in 2013. economic growth).

Interpreting the data – League Table 2

High NEET rates suggest an interrupted transition from school to work, or from school to further education, with long-term individual and societal costs. Increases in the NEET rate reflect the recession’s impact on a generation of young people; the kind of productive adulthood their parents took for granted is slipping away.

INNOCENTI REPORT CARD 12 11 SECTION 2 THE LEAGUE TABLES

League Table 3 How people say their lives have changed What people say about their living situation when asked... Country rankings based on change 2007–2013, Gallup World Poll. Figures in columns 1 to 4 show the relative position of each country in relation to the rest, and column 5 indicates the number of these indicators that had worsened in each country between 2007 and 2013.

Direction of Countries ranked based on change 2007–2013 Recent Impact change Have there been Did you Overall Do most Number of ! = >2 1 times in the past 2 experience 3 satisfaction 4 children in 5 indicators 6 indicators 12 months when you stress today? with life? (country) have worsening worsened Country did not have enough the opportunity 2007–2013 2011–2013 money to buy food to learn and grow that you or your family every day, or not? needed? Germany 4 9 3 6 0 Switzerland 3 12 8 11 1 Israel 4 29 6 2 1 ! Slovakia 26 13 3 4 2 Chile 1 32 1 14 1 Iceland 18 16 3 11 2 Australia 13 6 15 15 1 Austria 4 16 8 21 2 Japan 8 7 27 8 1 Bulgaria 1 n.a. 11 29 1 Latvia 28 15 7 5 2 Sweden 4 11 10 34 2 Denmark 8 9 28 15 1 Mexico 23 8 2 28 2 Lithuania 29 4 28 1 2 Republic of Korea 32 2 12 17 1 ! Norway 16 21 15 11 2 Czech Republic 8 25 12 19 1 France 26 5 15 19 1 Malta 20 25 15 8 2 Poland 18 20 28 3 3 United Kingdom 8 25 15 21 2 ! Belgium 13 18 24 17 3 Italy 13 21 36 8 3 Luxembourg 16 25 15 26 3 ! New Zealand 23 1 31 31 3 Canada 8 32 15 34 2 Hungary 41 18 24 6 3 Estonia 35 13 15 36 3 ! Croatia 29 n.a. 15 33 2 Netherlands 29 30 24 21 4 ! Romania 32 3 33 37 3 Slovenia 20 34 12 39 3 Finland 20 34 31 21 4 United States 37 21 33 21 4 ! Portugal 35 21 35 31 4 ! Spain 23 30 40 38 4 ! Ireland 32 36 38 30 4 ! Turkey 40 38 37 27 4 ! Cyprus 38 37 38 40 4 ! Greece 39 39 41 41 4 !

See data sources and notes on page 44

12 INNOCENTI REPORT CARD 12 SECTION 2 THE LEAGUE TABLES

Another way of looking at the impact » In 29 of the 41 countries, the » Some of the trends indicate that of the Great Recession is simply to survey shows an increase in the dramatic societal changes are ask people about their experiences percentage of respondents who under way. In Greece, the share and perceptions. The Gallup World reported not having enough money of respondents saying they Poll does that every year, using a to buy food for themselves and “experienced stress today” representative sample of 1,000 their family. Again in 29 countries, jumped from 49 per cent in 2006 respondents in each country. The the stress indicator increased. In to 74 per cent in 2013. In the four questions in League Table 3 almost half of the countries, overall United States, the share of come from those polls. life satisfaction decreased. And in respondents that have experienced not having enough Key findings: 21 of the 41 countries, fewer respondents agreed with the money to buy food doubled, from » Beyond income and statement that children have the 10 per cent to 20 per cent. The employment levels, the opportunity to learn and grow. share of respondents who think recession affected a number children have an opportunity to of other dimensions of » In terms of its impact on personal learn and grow dropped by people’s lives. In 18 of the 41 experiences and perceptions, the between 10 and 20 percentage countries, three or more of recession is certainly not over. In points in five countries: these indicators reveal rising 13 countries, negative responses Cyprus, Greece, Slovenia, Spain feelings of insecurity and to three or four questions were still and Romania. stress from 2007 to 2013. The rising between 2011 and 2013, Summary most severely affected particularly in countries such as countries are clustered at the Cyprus, Greece, Ireland, Israel, the The overall evidence from our three bottom of the table. Netherlands, Spain and Turkey. league tables paints a vivid picture of how children and families have fared during the Great Recession. Interpreting the data – League Table 3 Although each league table provides somewhat different dimensions of well-being, countries like Croatia, Greece and Spain are Countries are ranked based on their average score across the four consistently placed in the bottom indicators, each of which measures how responses changed third across all dimensions, between 2007 and 2013. The highest number indicates the sharpest highlighting how badly they have change. Column 5 indicates how many of the responses to the four been hit by the recession. On the were negative over the full period. Note that these data are collected other hand, some relatively wealthy in a different way from those reported in official statistics and should countries (such as Canada, Finland, be interpreted with care when it comes to individual data points.i the Netherlands and the United States) have seen only small Due to data availability, the numbers in the table refer to the increases – or even declines – in population in general, not to families with children. However, for the child poverty and yet rank in the question on not having enough money to buy food, it was possible bottom third of the Gallup league to disaggregate respondents living in families with children for a table, suggesting that monetary subset of 31 countries. In the 10 countries where responses changed poverty alone does not tell the the most, the increase was even higher in families with children (in whole story of the well-being of all but one country). families during this period. The next i For a more in-depth exploration of the Gallup World Poll, as well as a sections of the report provide more validation exercise where Gallup World Poll indicators are compared to details behind these aggregate corresponding indicators from other established data sources, see: numbers, in order to help us Holmqvist, G. and L. Natali, ‘Exploring the Late Impact of the Financial Crisis using Gallup World Poll Data: A note’, Innocenti Working Paper 2014-14, understand who suffered most and UNICEF Office of Research, Florence, 2014. how countries responded.

INNOCENTI REPORT CARD 12 13 SECTION 3 HOW A FINANCIAL CRISIS TURNED INTO A CRISIS FOR CHILDREN

Box 1 Measuring the exposure to the Great Recession

Bearing in mind that the recession was different in each country, we have separated the countries into three groups, in order to assess their exposure to the crisis: most, moderately and least affected.i

Most affected: a) Countries that are supported by International Monetary Fund (IMF)/EU/European Central Bank programmes and that promptly implemented fiscal adjustments: Estonia, Hungary, Iceland, Latvia and Lithuania. b) Countries with evident fiscal This section presents arguments problems that experienced market pressure (with a Credit Default and data that show how the global Swap spread higher than 500 in 2012): Croatia, Cyprus, Greece, financial shock and ensuing Ireland, Italy, Portugal and Spain. recession turned into a crisis for children. It reveals a strong Moderately affected: Countries that are highly indebted (more than correlation between the extent to 60 per cent of Gross Domestic Product (GDP)) or that suffered a which the recession ravaged large debt increase (more than the average): Austria, Belgium, national economies and the decline Canada, Finland, France, Germany, Israel, Japan, Malta, the in child well-being since 2008. In Netherlands, New Zealand, Romania, Slovakia, Slovenia, the United countries where the Great Kingdom and the United States. Recession hit hardest, children are Least affected: Countries least affected by the crisis:i i Australia, suffering the most and will bear the Bulgaria, Chile, Czech Republic, Denmark, Luxembourg, Mexico, consequences the longest. Below, a Norway, Poland, Republic of Korea, Sweden, Switzerland and Turkey. conceptual framework traces the paths that increased the risks to i For a more extensive explanation of the rationale behind this classification see: Natali, L., B. Martorano, S. Handa, G. Holmqvist and children and weakened the ability of Y. Chzhen, ‘Trends in Child Well-being in EU Countries during the Great families and states to mitigate those Recession: A cross-country comparative perspective’, Innocenti Working risks. The variables triggering the Paper 2014-10, UNICEF Office of Research, Florence, 2014. risks are numerous and diverse in i i Although Luxembourg and Mexico suffered more than other countries intensity and duration. Two factors during the recent economic crisis, they are included in the least affected group because a) they did not come under intense market pressure and prove particularly important for b) debt levels were lower than 60 per cent of GDP. More detail about households with children: the these two countries is reported in Natali et al. ‘Trends in Child Well-being position of parents in the labour in EU Countries during the Great Recession’. market and the depleted capacity of states to protect families.

14 INNOCENTI REPORT CARD 12 SECTION 3 HOW A FINANCIAL CRISIS TURNED INTO A CRISIS FOR CHILDREN

Conceptual framework: How did the financial crisis turn into a crisis for children?

Global financial crisis sovereign debt, economic crisis The crisis originated in the banking and housing sectors in developed countries and rapidly spread to other parts of the world. Although it Policies to contain the started as a financial crisis, it quickly evolved into an economic crisis, and negative consequences of in several European countries took the form of a sovereign debt crisis. the macroeconomic shock In the majority of the cases monetary policy was Transmission channels accommodating but inadequate, since policy Labour market: The decrease in demand for goods and services led to a interest rates were close to reduction in jobs and a tightening of labour conditions, provoking a drop zero. Many countries in household income. depreciated their national Financial market: Loss in private wealth due to asset deterioration and currencies to counter the restricted access to credit. drop in international demand. Public sector channel: Rapid deterioration of public finances prompted However, in the majority of aggressive austerity programmes and diverse responses in the form of cases the only tool available higher taxes and/or lower spending on public services. to policymakers was fiscal policy (e.g. Eurozone). Governments also implemented active and Household impact passive labour market policies. Reduced income due to Reduced consumption unemployment, increased Policy responses Policy Stress and domestic violence Social protection taxes and reduced transfers Lack of nurture and care system responses: Family asset depletion Social exclusion Deterioration in access to Automatic stabilizers, and quality of services such as unemployment insurance and minimum income. Direct impact on children and youth

Discretionary policies, Material deprivation Mental health such as cash payments in the early period and Nutrition/food security Protection cuts in public spending Human capital investment Employment opportunities with different priorities 1. Health in the second period. 2. Education Fertility

Source: Natali et al. ‘Trends in Child Well-being in EU Countries during the Great Recession’.

Trapped in the cycle of poverty in front of friends and classmates. Poverty is a self-reinforcing cycle. Children rarely manage to sidestep They are consciously or A child with unemployed parents the stress and suffering of parents unconsciously affected by changes may do less well at school. Doing enduring unemployment or a in their diets, the elimination of less well at school may bring significant reduction in income. sports, music or other activities, or more stress at home. And so on. They experience downturns in a lack of funds to buy school The longer a child is locked in the family fortunes in both subtle and materials. Extreme circumstances cycle, the fewer the possibilities painfully evident ways. They suffer may force their families from their of escape. minor slights and major humiliations homes or even their countries.

INNOCENTI REPORT CARD 12 15 SECTION 3 HOW A FINANCIAL CRISIS TURNED INTO A CRISIS FOR CHILDREN

Difficulty making ends meet Figure 1 Median income in European households with children (per exposure) Figure 1 and Figure 2 show the evolution of median income in 120 European households1 with children, and the percentage of 110 those households that are having great difficulty in making ends 100 meet. The households are with children categorized according to the 90 exposure of their national Median income – hhs 80 economies to the recession (see 2007 2008 2009 2010 2011 2012 Box 1). The first case shows a Year group of 14 (out of 30) countries Most affected Moderately affected Least affected whose median income decreased, Source: Eurostat. Median income is expressed in 2007 prices, national currency. with sharp falls in Ireland, Spain and Note: No data for Cyprus, Croatia, Slovakia and Turkey. the United Kingdom (all around 15 per cent), and even larger drops Figure 2 European households with children making ends meet with great in Greece, Iceland and Latvia (all difficulty (per exposure) 24 per cent or higher). 200 These trends are confirmed in Figure 3, which reports how 180 families say their circumstances 160 have changed. The proportion of 140 households stating that their situation is ‘very difficult’ has risen 120 on average in all categories, with 100 the greatest intensity in the meet with great difficulty

Hhs with children making ends 80 countries most affected.2 2006 2008 2010 2012 Year Children with workless parents Most affected Moderately affected Least affected Labour market exclusion and cuts Source: Eurostat. in social transfers appear to be the Note: No data for Turkey and Croatia; Switzerland (2006); Ireland (2012). underlying factors driving these changes. From 2008 to 2012, the Figure 3 Proportion of households reporting that their feeling about proportion of households where all household income is ‘very difficult’ (per exposure) adults were workless increased 120 most in those countries with the 3 highest incidence of child poverty. 110 The results of our own research show that the proportion of children 100 up to age 17 living in jobless households nearly doubled in 90 household income

Portugal and Spain, and nearly difficult to live on Very tripled in Denmark. The largest 80 absolute increases (above 5 per 2007 2008 2009 2010 2011 2012 2013 Year cent) were in Bulgaria, Greece, Ireland and Spain. Most affected Moderately affected Least affected Source: Gallup World Poll. Note: Out of the 41 countries covered in this report, the following are not included in this figure: Austria, Cyprus, Finland, Iceland, Ireland, Luxembourg, Malta, Norway, Portugal, Slovakia, Slovenia and Switzerland.

16 INNOCENTI REPORT CARD 12 SECTION 3 HOW A FINANCIAL CRISIS TURNED INTO A CRISIS FOR CHILDREN

Figure 4 shows these trends by the Figure 4 Children in jobless households (per exposure) exposure of the different groups to the recession. The implications of this rise in unemployment were 180 highlighted by the OECD in a recent 160 report: “With more than one in eight 140 working-age individuals in most countries now living in workless households 120 households, the success of 100

redistribution measures and active Children 0-17 living in jobless social policies is gauged to a large 2006 2008 2010 2012 Year extent on whether they can improve economic security for families Most affected Moderately affected Least affected without any income from work.”4 Source: Eurostat. Note: No data for Iceland, Norway, Switzerland and Sweden. The working poor and other vulnerable groups Households with two children have migrant or lone-parent families – and countries, the proportion of spending needs that are, on the risks multiply. Having a child or households with children unable to average, 40 per cent higher than children in a household increases face unexpected financial expenses comparable families without the risk of ‘working poverty’ has increased by almost 60 per children.5 As a consequence, (working, but below the poverty line) cent, on average. For many households with children are much from 7 per cent to 11 per cent. For households, their toehold on the more likely to be poor. Add in other lone parents, this almost doubles lower rungs of middle-class life is layers of vulnerability – such as (20.2 per cent).6 In the most affected increasingly fragile (see Box 2).

Figure 5 Change in severe child material deprivation in Europe (2008–2012) 50

40

30

20 Per cent Per

10

0

-10 Italy Spain Malta Latvia France Poland Ireland Cyprus Austria Finland Greece Iceland Estonia Norway Bulgaria Slovakia Sweden Portugal Belgium Slovenia Hungary Romania Germany Lithuania Denmark Switzerland Netherlands Luxembourg Czech Republic United Kingdom Change (2008–2012) 2008 2012

Source: Eurostat. Note: No data for Croatia.

INNOCENTI REPORT CARD 12 17 SECTION 3 HOW A FINANCIAL CRISIS TURNED INTO A CRISIS FOR CHILDREN

Box 2 Europe: Less income, less protection, more material deprivation

The overall picture of material well-being of families cent) in 2012 lived in three countries: Italy (16 per is broadly captured by the ‘severe material cent), Romania (14 per cent) and the United Kingdom deprivation’ indicator. Children (0–17) are considered (14 per cent). to be severely materially deprived when the Provisional estimates for 2013 show that some household in which they live cannot afford at least countries – notably Estonia and Latvia – started on four of the following nine items: 1) to pay rent, the road to recovery in 2012. However, there are still mortgage or utilities; 2) to keep the home adequately reasons to be concerned. The deterioration in the warm; 3) to face unexpected expenses; 4) to eat severe material deprivation indicator is mainly related meat or proteins regularly; 5) to take a holiday; 6) to to the first five components on the list, those most have a television; 7) to have a washing machine; sensitive to household income. The last four 8) to have a car; 9) to have a telephone. In contrast deprivation items – the so-called ‘durables’ – are to purely monetary measures of the financial likely to worsen in the latter phase, as the recession resources of households, this indicator shows the continues and families are unable to repair or replace satisfaction of material fundamental needs.i their assets.i i i In 2008, there was an abrupt break in the positive Material deprivation and income poverty can be trend of previous years. In the first phase of the combined for a more complete story of the impact of recession (2008–2010), the proportion of children the recession on households with children. Figure 6 with severe material deprivation increased sharply in shows that in Greece and Iceland – the two countries the countries most affected by the Great Recession, at the bottom of the child poverty league table – not and was relatively stable in the remaining countries. only has the absolute number of poor children risen After 2010, deprivation worsened, on average, dramatically, but it has done so in the context of everywhere. Two-thirds of the European countries in increased severe material deprivation. The proportion this analysis saw material deprivation worsen after of children who are income poor and severely 2008 (see Figure 5), with the largest absolute deprived has tripled in Greece and quadrupled in increases in Cyprus, Greece and Hungary. In relative Iceland. terms, the severe child material deprivation rate doubled in Greece and tripled in Iceland, albeit from a very low base. In the group of hard-hit countries, the proportion of severely deprived children nearly doubled in four years. i de Neubourg, C., J. Bradshaw, Y. Chzhen, G. Main, B. The magnitude of this change is worthy of note. The Martorano and L. Menchini, ‘Child Deprivation, Multidimensional Poverty and Monetary Poverty in absolute number of children living in severe material Europe’, Innocenti Working Paper No. 2012-02, UNICEF deprivation in the 30 European countries analysed Innocenti Research Centre, Florence, 2012, p. 1. was 11.1 million in 2012 –1.6 million more than in i i There was a break in 2012 in the United Kingdom 2008. This trend is the result of a net effect that series: the figures should be interpreted with caution. includes substantial decreases (more than 300,000 i i i McKnight, A., ‘Measuring Material Deprivation over fewer deprived children in Germany and Poland) and the Economic Crisis: Does a re-evaluation of “need” affect measures of material deprivation?’, Gini Policy unprecedented increases in four countries (Greece, Paper 4, Centre for Analysis of Social Exclusion, London i i Italy, Spain and the United Kingdom). Almost half of School of Economics, 2013. www.gini-research.org/ the severely materially deprived children (44 per system/uploads/553/original/PP4.pdf?1380631527

18 INNOCENTI REPORT CARD 12 SECTION 3 HOW A FINANCIAL CRISIS TURNED INTO A CRISIS FOR CHILDREN

Food, shelter and nurture Figure 6 Child poverty and severe material deprivation in Greece and Iceland (2008 and 2012) A shortfall in family income is particularly hard on children. The Greece 2008 Greece 2012 food they eat, where they live, the time they spend with parents and friends, and the public services to which they are entitled – these are important factors that determine their well-being.

Access to food Per cent Daily nutritional intake and the Total poor 23.0 Poor only 16.9 consumption of nutritious food, such Total deprived 10.4 as fish and vegetables, declined in Deprived only 4.3 the most affected countries during Poor and deprived 6.2 the recession. After 2008, the Per cent Neither poor nor 72.7 percentage of households with deprived Total poor 40.5 Poor only 22.6 children unable to afford a meal with meat, chicken, fish (or a vegetable Total deprived 20.9 Deprived only 2.9 equivalent) every second day more Poor and deprived 17.9 than doubled in Estonia, Greece, Neither poor nor 56.6 Iceland and Italy, reaching 10 per deprived cent, 18 per cent, 6 per cent and 16 per cent, respectively, in 2012. Iceland 2008 Iceland 2012 UNICEF National Committees report that diverse public and private initiatives have sprung up across Europe to combat the increasing Per cent problem of malnutrition, including Total poor 11.2 school meal programmes, food Poor only 10.7 banks and meal vouchers. Total deprived 0.9 Furthermore, some 9 million poor Deprived only 0.4 women and children in the United Poor and deprived 0.6 Neither poor nor 88.4 States receive federal food Per cent 7 deprived assistance annually, with more than Total poor 31.6 47 million Americans living in Poor only 29.1 households that have difficulty in Total deprived 3.1 putting food on the table.8 Between Deprived only 0.6 2008 and 2013, the use of food Poor and deprived 2.6 banks by families in Canada Neither poor nor 67.8 deprived increased by 23 per cent.9 Source: EU-SILC. Housing conditions Evictions, mortgage defaults and mortgages were in negative equity 2008. The recession has also foreclosures have been a tragic in 2013. In Greece, at least 60,000 affected savings and economic reality in a number of countries hit by house owners faced immediate opportunities throughout the the recession. In Spain, 244,000 danger of eviction in 2013.10 In the country.11 evictions were registered from 2008 United States, where the financial to 2012 by the European Federation The cost of housing may be a crisis began, more than 13 million of Public, Cooperative & Social challenge for many people long foreclosures have been filed since Housing. In Ireland, 400,000 before evictions and foreclosures

INNOCENTI REPORT CARD 12 19 SECTION 3 HOW A FINANCIAL CRISIS TURNED INTO A CRISIS FOR CHILDREN

take place. Rent, mortgage of being contacted by child in the income chain. In the end, how payments and other housing costs protective services.16 the impacts are spread depends less are generally the largest on the depth of the recession and Essential services expenditure in a family budget. The more on the existing economic As family incomes decrease and proportion of children in families structure and social safety nets and, contextual conditions deteriorate, so overburdened by housing costs has most importantly, on policy risk in children’s lives increases. And increased in 19 European countries responses. the capacity of governments and since 2008.12 In some cases, lack of public institutions to protect them To assess whether the impact of the access to affordable housing leads has not improved accordingly in recession did fall disproportionately to homelessness of children and critical areas such as health and on children, the situation of average other extreme consequences.13 education. In European countries children was compared to that of Parental time and care that have been moderately and the poorest children in the income The quantity and quality of time that severely affected by the recession, distribution chain. The impact on parents spend with their children is the proportion of young adults with children in particularly vulnerable affected by income reductions and unmet health needs has increased groups, such as migrants, lone- contextual stress. Loss of parental significantly since 2008. More than a parent families and workless time is more acute in poorer third of OECD countries reduced households, was also assessed, as families, contrary to conventional public education spending after were the impacts on children wisdom.14 Long working hours, less 2010, and several more froze it.17 compared to the impact on other help at home and a lack of leisure These cuts will have both short-term traditionally vulnerable social groups, activities can have a debilitating and long-term impacts. such as the elderly, as well as on effect on family relationships, society in general. Have children suffered most? affecting children in critical periods Impacts on the poorest of intellectual and emotional How does an economic crisis affect development. For separated or inequality? Inequality can lessen if Since 2008, the position of the divorced couples in Italy, for better-off households lose income, poorest children has actually instance, income constraints caused while poorer sectors of society worsened in most of the countries by the recession add to the remain protected by existing public studied. The poverty gap indicator pressure on already stressed policies and safety nets. But (see Figure 7) captures the depth of relationships.15 Trends in violence inequality can worsen if the weight this phenomenon by measuring the against children also feel an impact: of the recession falls on the weakest distance from the poverty line to the in the United States, the drop in consumer confidence since 2007 Figure 7 Change in poverty gap vs change in headcount (2008–2012) has been associated with a considerable increase in the Change poverty gap= 1.0352 + .22455 change headcount GR incidence of mothers hitting their 10 ES children frequently. We find that the DK HU large decline in consumer 5 SK CY IS AT SE NL IT LV confidence during the Great BE PT PL CZ SI FR Recession, as measured by the CH EE LU 0 BG IE FI DE LT Consumer Sentiment Index, has NO UK been associated with worse -5 MT parenting behaviour. In particular, RO lower levels of consumer -10 Change in poverty gap (anchored) confidence are associated with -10 0 10 20 increased levels of high-frequency Change in headcount (anchored) spanking, a parenting behaviour that Fitted values is associated with greater likelihood R-squared=0.1426

Source: Eurostat for the anchored headcount; EU-SILC for the anchored poverty gap.

20 INNOCENTI REPORT CARD 12 SECTION 3 HOW A FINANCIAL CRISIS TURNED INTO A CRISIS FOR CHILDREN

Box 3 The crisis in Greece through a child’s eyes

The indicators in this Report Card do not fully capture stopped going on holiday trips (see Figure 8). how children’s views of their lives have changed. To Around one student in ten had to stop tutoring gain a deeper insight into the perspectives of sessions or had to move to another area or to a children, we commissioned early analysis of the relative’s house, and 3 per cent switched from most recent Health Behaviour in School-aged private to public schools. Children (HBSC) survey (2014) on the behaviour of The children surveyed were perceptive about other 11-, 13- and 15-year-old students in Greece, one of consequences of the recession, such as increased the countries most affected by the recession. The stress on parents from income cuts or job losses. results are instructive. These events affect family relationships, as seen in Despite the best efforts of families to insulate their the large share (as high as 27 per cent) of those offspring from the worst consequences of the reporting tension and fights within their families. The recession, school children in Greece revealed that proportion of children reporting high satisfaction with they are highly aware of problems that affect their relationships within the family dropped by 3 per cent immediate context. Those reporting that their between 2006 and 2014. As for their overall life family’s economic situation is ‘not well off’ doubled satisfaction, the share of children reporting a high from 7.2 per cent in 2006 to 14.5 per cent in 2014. quality of life dropped by almost 10 per cent over the An increasing share of them said that the economic same period. situation of the area where they live had worsened (from 22.2 per cent to 29.5 per cent in the same i period).i In 2014, more than one child in five reported Kokkevi, A., M. Stavrou, E. Kanavou and A. Fotiou. ‘The Repercussions of the Economic Recession in that at least one parent had lost their job, 5 per cent Greece on Adolescents and their Families’, Innocenti said their family could not afford to buy food, and Working Paper No. 2014-07, UNICEF Office of almost 30 per cent reported that the family had Research, Florence, 2014.

Figure 8 Children’s self-reporting of the effects of the crisis in Greece

at least one parent lost job 21.3

inability to buy food 5.4

no vacation/travelling 27.9

stopped tutoring 10.5

changed school 3

moved to other area 8.2

family tension 27.3

0 5 10 15 20 25 30 Per cent

Source: 2014 HBSC survey.

INNOCENTI REPORT CARD 12 21 SECTION 3 HOW A FINANCIAL CRISIS TURNED INTO A CRISIS FOR CHILDREN

median income of those below the Impacts on the most vulnerable non-migrant households. In many line, expressed as a percentage of The poverty trends discussed above European countries, child poverty the poverty line. For children, this may mask the situation of children in increased faster (or fell more slowly) proportion increases as the particularly vulnerable situations, such for children in migrant households recession advances in countries as those in workless, lone-parent, than for other children. Most notable that are more affected by it. The large families, or migrant households. is Greece, where poverty rates rose poverty gap is higher in countries Their deteriorating living conditions by 35 percentage points for children where poverty has increased most, have already been highlighted in in migrant households, compared meaning that poverty in those Report Card 10, which called for with 15 percentage points for all countries is more extensive and policies and actions to protect other children. In Iceland, the more intense. In Greece and Spain, them.18 Recent data show how these poverty rate for children in migrant poor children were further below groups consistently appear in the households increased by the poverty line in 2013 than they most-severe range in poverty 38 percentage points, twice the were in 2008. It is notable that this statistics. Their needs call more than increase among non-migrant form of discrimination increased in ever for specific types of attention households. Thus, in the two some countries where overall child and services, which are often first to countries where child poverty increased the most, children in poverty decreased, such as Belgium disappear in a financial crisis. migrant households suffered and Slovakia, suggesting that the Figure 9 shows that the impact of the disproportionately. tax changes and transfers intended recession on children in migrant to help the poorest children were households19 in Europe was often Other groups of children bearing a relatively ineffective. greater than it was on children from heavier burden in the recession

Figure 9 Absolute difference in anchored poverty change (2008–2012) between children in migrant households and other children in Europe (percentage points) 25

20

15

10

5

0 Percentage points Percentage

-5

-10

-15 Italy Spain Malta Latvia France Ireland Cyprus Austria Finland Greece Iceland Estonia Norway Sweden Portugal Belgium Slovenia Germany Lithuania Denmark Switzerland Netherlands Luxembourg United Kingdom

Total child poverty rate decreased Total child poverty rate increased/stayed the same

Source: EU-SILC. Notes: Data for 2011 are used for Belgium and Ireland. Countries with insufficient case numbers of children in migrant households excluded. Bars are changes in absolute poverty with positive values indicating a worsening among chldren in migrant households relative to other children.

22 INNOCENTI REPORT CARD 12 SECTION 3 HOW A FINANCIAL CRISIS TURNED INTO A CRISIS FOR CHILDREN

include those in households with lone poverty fell slightly in couple-parent increases in poverty and material parents, low work intensity and large families. In contrast, child poverty deprivation than the national average. families. Among 30 European on the whole decreased in Canada In half of the European countries countries, the inequity of the impact and Japan; but although child studied, poverty increased faster (or on children is highest in Greece. The poverty rates fell faster among else fell more slowly) for children trend is similar in Iceland for children children in lone-parent families, than for the population as a whole. in workless households and lone- they remained substantially higher The elderly, also vulnerable, fare parent families. However, in some than for those in couple-parent better than the young in this countries at the highest end of the families. This underscores the fact analysis. Figure 10 shows the at-risk- range of child poverty, poverty that economic conditions affect of-poverty rate in populations aged decreased for children in vulnerable children in lone-parent families under 18 and over 65 in 2008–2012. households, such as lone-parent more than other children. The blue dots measure the change households in Cyprus and the Czech Impacts on children versus in poverty among children versus Republic, workless families in Belgium other groups the change in poverty among the and the United Kingdom, and large Another approach to assessing elderly over this time period, with families in Lithuania and Spain. how hard children have been hit by positive values indicating that the Mixed trends are also observed in the recession is to compare the position of children worsened some non-EU/OECD countries. In number of them in poverty against relative to the elderly. In all but three lone-parent households in Israel, for the general population. In many of the 31 countries analysed, the example, children have experienced countries, households with children rate increased more rapidly (or an increase in poverty, even as have experienced more intense decreased more slowly) for the

Figure 10 Absolute difference in anchored poverty change (2008–2012) between children and the elderly (percentage points)

30

25

20

15

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0

Percentage points Percentage -5

-10

-15

-20 Italy Spain Malta Latvia France Poland Ireland Austria Cyprus Croatia Finland Greece Iceland Estonia Norway Bulgaria Slovakia Sweden Portugal Belgium Slovenia Hungary Romania Germany Lithuania Denmark Switzerland Netherlands Luxembourg Czech Republic United Kingdom

Difference in differences under 18 (2008–2012) 65 or over (2008–2012)

Source: Eurostat (last update 14.07.2014). Notes: Sorted by the difference in the anchored poverty rate increase between children and the population. Break in the series for Austria and the United Kingdom in 2012.

INNOCENTI REPORT CARD 12 23 SECTION 3 HOW A FINANCIAL CRISIS TURNED INTO A CRISIS FOR CHILDREN

young than for the elderly (positive poverty increased in 20 countries. In protection for the elderly works when values for the blue dots). In 24 of eight countries, the gap in the it is needed. This is less true for the 31 countries, the trend shows a change in poverty between the two children. reduction in at-risk-of-poverty levels groups exceeds 10 percentage A generation cast aside among the elderly, whereas child points. These numbers suggest that One of the long-term impacts of the Great Recession is to be found in Figure 11 Youth unemployment (15–24) per exposure adolescent and young-adult unemployment. Youth unemployment and underemployment have reached 200 worrying levels in many countries. In addition to the data in League Table 2 (see Section 2), this Report Card looks 150 at key indicators in the labour market for young people, including recent 100 data on self-perception. It is the story

Youth unemployment 15–24 Youth of a generation that has been cast aside, and failure to address it could 2006 2007 2008 2009 2010 2011 2012 2013 lead to high societal costs. Year An epidemic of youth unemployment Most affected Moderately affected Least affected Figures 11, 12 and 13 paint a picture Source: Eurostat. of youth labour in the recession, Notes: Long-term unemployment: Long-term unemployment (12 months or more) for young people 15–24. No data for Cyprus, Denmark, Finland, Iceland, Lithuania; Sweden (2006); Luxembourg (2007 and 2009). something European Union Human Underemployment: ‘Involuntary’ part-time workers, 15–24, percentage of active population. No data for Rights Commissioner Nils Muižnieks Bulgaria, Estonia, Hungary, Iceland, Lithuania or Luxembourg. calls a “pathology of austerity”.20 Temporary employment: Temporary employees (15–24) as percentage of the total number of employees (15–24).

Figure 12 Change in the youth (15–24) unemployment rate, 2008–2013 70

60

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40

30 Per cent Per 20

10

0

-10 Italy Chile Israel Spain Malta Latvia Japan Turkey France Poland Ireland Cyprus Austria Croatia Finland Greece Iceland Mexico Estonia Canada Norway Bulgaria Slovakia Sweden Portugal Belgium Slovenia Hungary Australia Romania Germany Lithuania Denmark Switzerland Netherlands Luxembourg New Zealand United States Czech Republic United Kingdom Republic of Korea Republic Change (2008–2013) 2008 2013

Source: Eurostat; OECD.Stat.

24 INNOCENTI REPORT CARD 12 SECTION 3 HOW A FINANCIAL CRISIS TURNED INTO A CRISIS FOR CHILDREN

Unemployment in the 15–24 age Figure 13 Trend in youth underemployment, temporary employment and group increased in all but seven of long-term unemployment in the most affected countries the 41 countries covered in this report between 2008 and 2013. 350 Four stand out as having increases 300 in excess of 25 percentage points: Croatia, Cyprus, Greece and Spain. 250

Youth unemployment in the same Index 200 four countries had fallen steadily 150 from 2004/2005 to 2007/2008. The 100 recession reversed that trend. 2006 2007 2008 2009 2010 2011 2012 2013 In Greece and Spain, the pattern is Year particularly striking. Unemployment Long-term unemployment Underemployment Temporary employment in the 15–24 age group increased Source: Eurostat. from an already high base of over Notes: Long-term unemployment: Long-term unemployment (12 months or more) for young people 15–24. 20 per cent to more than 50 per No data for Cyprus, Denmark, Finland, Iceland, Lithuania; Sweden (2006); Luxembourg (2007 and 2009). cent in 2013. Half of all young job Underemployment: ’Involuntary‘ part-time workers, 15–24, percentage of active population. No data for Bulgaria, Estonia, Hungary, Iceland, Lithuania or Luxembourg. seekers remained unemployed. Temporary employment: Temporary employees (15–24) as percentage of the total number of employees Nations where such a large (15–24). percentage of young people are not In certain countries, including Mexico percentage of those who are in part- working face extraordinary and Turkey, high inactivity rates time work or underemployed has challenges, such as the appear to be driven by large tripled. Full-time contract work for sustainability of national pension proportions of young women raising young people has become more plans. Generally, youth families.21 In countries where the common, contributing to the unemployment evolves in parallel NEET rate has increased most, precariousness of labour markets. with overall adult unemployment, notably Cyprus and Greece, the Increases in long-term but exceptions do occur: in Italy’s change is dominated by rising youth unemployment rates (12 months or 15–24 age group, unemployment unemployment. In countries such as more) in countries more exposed to levels increased nearly four times Latvia and Lithuania (which have the recession are largely due to more than in the 25–54 age group. seen a moderate upturn in the NEET youth unemployment. rate) and Slovakia and Spain (which Too many young people not in The labour market for adolescents have had a larger surge), the education, employment or training and young adults was already a increase has also been driven by As a tool for measuring the youth problem before 2008, but the rising youth unemployment, in spite labour market, unemployment rates recession has magnified it for a of a concurrent decrease in inactivity. have significant limitations, because whole generation. The relevance of By contrast, in Romania the increase they overlook those who are not these trends should not be in the NEET rate has been dominated economically active. So surveys underestimated. A long period of by increased inactivity. And in Turkey, gather data on young people who underemployment or inactivity can a vast decrease in the NEET rate has are not in education, employment or have an enduring impact on one’s been almost entirely due to a training. The NEET rate includes lifelong financial security. It can decrease in inactivity. both those who are seeking work stifle career plans, reduce (the unemployed) and those who Unfortunately, even when expectations and lead to are not (the inactive). The rate offers unemployment or inactivity rates demoralization. For whole societies, a measure of the percentage of the decline, it rarely means that youth it increases demand for social youth population that is absent from have found stable, reasonably paying benefits, decreases workforce the labour market and education, as jobs (see Figure 13). In the 15–24 contributions to social security well as of those who are age group in countries more systems, and erodes a pillar of discouraged and disengaged. exposed to the recession, the social cohesion.22

INNOCENTI REPORT CARD 12 25 SECTION 3 HOW A FINANCIAL CRISIS TURNED INTO A CRISIS FOR CHILDREN

Summary rights. The progress made in The Great Recession had the education, health and social greatest impact on the weakest, protection over the last 50 years and possibly for the longest time. is now at stake. This section has shown the many Still, there are some signs of hope. overlapping ways in which children Eighteen of the countries analysed suffered from the crisis, while for this report managed to limit, or others – such as the elderly – even reduce, child poverty amid this managed to be protected. It has economic storm. Four of them also proved how many countries saw reduced the gap between poor and large increases in the material the poorest children. Despite the deprivation of children (possibly a recession, disproportionate youth better longer-term measure of unemployment was avoided in poverty), and has highlighted the several countries, and, in many lifetime risks of entering the labour others, public and private safety market in a recession. nets have proved resilient in a time By any measure, this is a of great need. Nothing is inevitable. discouraging reversal in what Section 4 looks at how countries was a positive trend in the have responded, and the consolidation of young people’s implications for children.

26 INNOCENTI REPORT CARD 12 SECTION 4 UNEVEN RESPONSES

At the beginning of the Great Figure 14 Change in child poverty headcount (anchored) vs exposure

Recession, some countries were Change headcount = 71.806 - 70.946 GDP ratio better positioned than others to 20 IS weather the economic storm, and GR some had strong social protection measures in place. Yet how LV governments responded to the HR IE crisis mattered a great deal. 10 ES LT Poverty increased in most LU IT countries, but decreased in some. EE MX The recession was global, but it CY HU FR UK SI US DKPT NL NZ MT IL BG did not result in a severe crisis for 0 DE AT SE CZ BE children in every country. JP CA RO TR FI KR NO CH Figure 14 SK compares changes in AU child poverty to changes in PL CL national GDP. Of the 41 EU/ Change in child poverty headcount (anchored) -10 OECD countries listed, those 0.8 0.9 1.0 1.1 1.2 more exposed to the recession Exposure (GDP ratio) had larger increases in child poverty. Yet a closer examination Fitted values of the data shows that, while child poverty increased in most R-squared=0.4924 countries, in others it declined. Source: See Data Sources: League Table 1 on page 44 for changes in anchored poverty; IMF World Croatia and Cyprus, with similar Economic Outlook. economic circumstances, had Note: The x-axis shows exposure to the recession, using the ratio of GDP from 2007 to 2012. The y-axis very different outcomes for the shows change in child poverty from 2007 to 2012 (positive values indicate increases). well-being of children. Lithuania and Mexico had modest (or What was spent, and how benefits act as counter-cyclical even dynamic) economic At the start of the recession, not economic stabilizers. growth, yet child poverty surprisingly, child poverty was lower Beyond that, OECD countries and indicators deteriorated. where public spending on families many others adopted stimulus To understand how governments and children was higher. During the packages in the initial phase of the addressed the recession and, more recession, welfare states were recession, pushing up public importantly, what worked well in expected to increase their public spending (see Figure 15). With the countries where child poverty protection spending, and many persistence of the recession, indicators did not deteriorate (or did.23 In such countries, the health however, national revenues fell and where they even improved), this and well-being of citizens, especially deficits increased significantly in section looks at the quantity and those in financial or social need, are many countries. Increasing pressure quality of government responses safeguarded by grants, from financial markets forced many over the past five years, with some unemployment assistance governments to make budget cuts. final considerations around the programmes, pensions and other The Eurozone’s U-turn was period before the recession. benefits. In a recession, these particularly abrupt.

INNOCENTI REPORT CARD 12 27 SECTION 4 UNEVEN RESPONSES

Figure 15 Change in public expenditure, 2007–2009 12

10

8

6

4

2 Change in public expenditure (GDP percentage points)

0 Italy Spain Malta Latvia France Poland Ireland Cyprus Austria Finland Greece Iceland Estonia Norway Bulgaria Slovakia Sweden Portugal Belgium Slovenia Hungary Romania Germany Lithuania Denmark Switzerland Netherlands Luxembourg Czech Republic United Kingdom

Source: Eurostat.

While Europe retrenched, Chile, initial margin of action, as well as to by expanding existing social Japan, Republic of Korea and the the magnitude and design of the protection programmes, United States maintained government initiatives. Targeting extending cash transfers to the expansionary policies to support cash payments at the poorest poorest families with children, their economies. Norway was families with children helped to and expanding labour market Europe’s sole exception, while in protect vulnerable families and measures such as unemployment Sweden and Switzerland the boost the economy at the same insurance. Mexico introduced a consolidation measures that were time. Some examples: similar stimulus package in the early years of the recession, but implemented amounted to less than » Chile and Mexico had worsening fiscal conditions 0.5 per cent of GDP. experienced extraordinary pushed the country into a economic and social In countries that made a similar consolidation process from improvements in the decade fiscal effort and were equally 2010 onwards. before the financial crisis, but in exposed to the recession (see Box 1 2008–2009 they were hit hard by Australia’s increase in spending in Section 3 for exposure criteria), » recession-induced trade declines. on families had a more positive the impact of the spending is mixed. Chile, which had more fiscal impact than the ambitious tax An assessment of government space, spent twice as much as cuts implemented in New responses suggests that their Mexico on its stimulus package, Zealand, where poverty and effectiveness was related to the supporting families with children inequality stagnated (see Box 4).

28 INNOCENTI REPORT CARD 12 SECTION 4 UNEVEN RESPONSES

Box 4 The Australian Household Stimulus Package

As with most other OECD countries, the Great Recession hit Australia. But unlike many other countries, Australia managed to protect families as part of its economic recovery strategy. One of the most important contributory factors was a fiscal stimulus of more than 4 per cent of GDP (a move that was facilitated by the fact that the country had the necessary fiscal space). A portion of the Figure 16 Incidence rate of the Single Income stimulus package was designed to support Family Bonus, the Back to School Bonus, and the Tax Bonus for Working Australians families in economic difficulties and to sustain their consumption. In particular, the 2009 Back to School Bonus + Single Income Family Bonus household stimulus packages were made up 3 of three main one-off payments: the Tax Bonus for Working Australians, provided to eligible 2 taxpayers; and the Back to School Bonus and Single Income Family Bonus, which were targeted at low- and middle-income families 1 with children. Share on income

Figure 16 0 As shows, the Single Income Family 1 2 3 4 5 6 7 8 9 10 Bonus and the Back to School Bonus were Decile clearly more progressive than the Tax Bonus. And while all these payments were able to Tax Bonus for Working Australians protect people from the risk of poverty, only 2 the cash payments targeted at low-income 1.6 families with children were able to stimulate consumption among the poor, as can be seen 1.2 from Figure 17. 0.8 It is possible to extract useful policy lessons

Share on income 0.4 from the Australian story. First, counter-cyclical policies are crucial in mitigating the negative 0 1 2 3 4 5 6 7 8 9 10 consequences associated with economic Decile recessions. Indeed, the prompt and robust reactions of the Australian government limited Figure 17 Impact of the Australian Single the possible negative effects of the crisis Income Family Bonus and the Back to School without jeopardizing growth – GDP growth has Bonus on consumption expenditure, percentage change between 2008 and 2009 increased steadily in Australia since 2009. Second, maintaining a sound fiscal balance 0.5 during normal times obviously provides the 0.4 policy space that allows a government to react 0.3 effectively during an economic downturn. But 0.2 some policies are more effective than others. 0.1 In this case, cash payments targeted at low- income families with children appear to have 0 (percentage change)

had a win-win effect, by protecting the poorest Consumption expenditure -0.1 all deciles poor families with children children and stimulating consumption to promote economic recovery.

INNOCENTI REPORT CARD 12 29 SECTION 4 UNEVEN RESPONSES

In general however, social spending spending to public spending (blue transfers, compared to only 11 in suffered (at least in absolute terms), line) levelled off and then began to the second phase (right panel). particularly for children and families. rise again, the share of that Interventions in Denmark, Finland Although the recession increased spending on families and children and the United Kingdom were the need for unemployment and (blue bars) declined. effective and sustained during the pension benefits, driving up social recession. But in more than a third The same is true in Europe, where protection spending in many of European countries, including in social transfers had an uneven countries, the share spent on family- France and Hungary, the ability of impact on child poverty (Figure 19). and child-related needs became a governments to reduce child In the first phase (left panel), 19 lower priority. Figure 18 shows that poverty declined, which contributed countries demonstrated an ability 2009 marked a turning point in this to worsening living conditions for to reduce child poverty (or to regard, just when families were children. The design and support the income of families under increasing pressure. While implementation of social with children) through social the contribution of overall social programmes clearly matters.

Figure 18 Social protection spending, share of total spending (blue line, left axis) and family- and child-related spending, share of total social protection spending (blue bars, right axis).

0.39 0.048 Family- and child-related spending, share of total social protection spending

0.38 0.046

0.37 0.044

0.36 0.042

0.35 0.04 Social protection - share of total spending

0.34 0.038

0.33 0.036 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

share of family and child spending share of social protection spending

Source: Eurostat.

30 INNOCENTI REPORT CARD 12 SECTION 4 UNEVEN RESPONSES

Figure 19 Amount of reduction in child poverty

First phase 2008–2010 Second phase 2010–2012 Lithuania United Kingdom Iceland Belgium Luxembourg Malta Ireland Finland United Kingdom Poland Estonia Czech Republic Latvia Austria Spain Norway Portugal Denmark Greece Romania Cyprus Germany Netherlands Bulgaria Denmark Luxembourg Switzerland Netherlands Slovenia Ireland Bulgaria Spain Italy Cyprus Finland Slovakia Malta Italy Belgium Portugal Romania Slovenia Germany Greece Austria Switzerland France Sweden Poland Iceland Hungary Latvia Norway France Slovakia Estonia Sweden Lithuania Czech Republic Hungary

-6 -4 -2 0 2 4 6 8 10 -7 -6 -5 -4 -3 -2 -1 0 1 2 3

Child poverty reduction 2008–2010 Child poverty reduction 2010–2012

Source: EU-SILC.

Interpreting the data – Figure 19

Comparing child poverty before and after the receipt of government support offers a measure of how effective governments were at reducing the number of poor children. The horizontal bars represent how government responses to the crisis affected countries’ capacities to protect poor children, by comparing the changes in child poverty reductions after social transfers in different periods: between 2008 and 2010 (after the implementation of stimulus packages), and between 2010 and 2012 (during the early stage of austerity). Positive values indicate that government interventions through social transfers have been more redistributive. Negative values indicate that social transfers became less effective in reducing child poverty.

INNOCENTI REPORT CARD 12 31 SECTION 4 UNEVEN RESPONSES

Although the need for budgetary the Gini index during the recession, replaced a flat tax with a cuts was undeniable in some broken into different income progressive tax structure and used countries (the Mediterranean region, components. In many countries, the the additional revenue to increase in particular), the shift from stimulus burden of the adjustment fell on social protection, leading to a to consolidation widened inequality. those in the lowest income brackets. reduction in inequality and a recent This is broadly reflected in Figure 20, By contrast, despite a reduction in decline in child poverty between which shows the net evolution of fiscal space during the crisis, Iceland 2012 and 2013.

Figure 20 Contribution of income, taxation and social transfers to changes in the Gini index, 2008–2012

0.04

0.03

0.02

0.01

0.00

-0.01

Gini index change -0.02

-0.03

-0.04

-0.05 Italy Spain Malta Latvia France Poland Ireland Cyprus Austria Finland Greece Iceland Estonia Norway Bulgaria Sweden Slovakia Portugal Belgium Slovenia Hungary Romania Germany Lithuania Denmark Switzerland Netherlands Luxembourg Czech Republic United Kingdom

Taxes Transfers Market

Source: EU-SILC. Notes: For Belgium and Ireland data refer to the period 2008–2011.

Interpreting the data – Figure 20

The Gini index is a common measure of inequality, which ranges from 0 (perfect equality) to 1 (perfect inequality). Figure 20 shows how different income sources (private household income, taxes and social transfers) contributed to changes in the Gini between 2008 and 2012. Positive bars indicate that the particular source of income increased inequality during this period. In Spain, for example, all three sources contributed to an increase in inequality.

32 INNOCENTI REPORT CARD 12 SECTION 4 UNEVEN RESPONSES

Variations on a theme Highlights from Table 1 (overleaf), Box 5 Did the crisis for which summarizes recent significant changes in government children begin before 2008? interventions directly related to children, show that, among non-EU OECD countries, a number adopted more generous and less restrictive policies for children: » Since 2009, Chile has increased family-related benefits. These policies take an integrated approach, including child care, When the storm of the Great Recession struck, some countries were education and health, as well as better prepared than others to shelter the most vulnerable sectors of labour integration programmes their societies. for parents (mothers, in particular). Targeted cash The reality is that “in most industrialized countries, at least a decade transfers for families in extreme before the start of the Great Recession, time and again children were poverty were increased in 2012 found to be at a greater risk of poverty than populations as a whole”, and in 2014. according to a background paper for this report. “Moreover, substantial differences in the risks of poverty persisted among » In 2010, Japan passed a child households with children long before [2008].”i A previous edition of allowance act that increased the this Report Card shows how, at the beginning of the recession, the value and coverage of benefits levels of poverty and deprivation among the most vulnerable families for those under 15, part of a (jobless, lone-parent and migrant families and households with low multi-sector plan to improve tax levels of parental education) were already intolerably high in some deductions and assist families OECD and/or EU countries.i i and lone-parent households. With hindsight, many countries with higher child vulnerability would » Turkey is working to integrate a have been wise to strengthen their safety nets during the preceding rights-based social protection period of dynamic economic growth. Social spending by OECD system. Most remarkable, in countries had been in decline since 1995; it increased temporarily in 2012 it introduced general health the first phase of the recession, but went on to resume its previous insurance that covers health trend (see Figure 21). For children, the recession followed a long services for all children, period of rising disparity and concentration of income (see Figure 22) regardless of parental income or – a trend, some argue, that undermines fairness, lowers commitment employment status. to social cohesion and restricts social mobility.i i i

In the European Union, a range of i Chzhen, Y., ‘Child Poverty and Material Deprivation in the European recently implemented reforms have Union during the Great Recession’, Innocenti Working Paper No. 2014-06, been positive: UNICEF Office of Research, Florence, 2014. i i » Bulgaria increased child benefits UNICEF Innocenti Research Centre, ‘Measuring Child Poverty: New league tables of child poverty in the world’s rich countries’, Innocenti and child-care leave benefits in Report Card 10, UNICEF Innocenti Research Centre, Florence, 2012. 2013–2014. i i i Deaton, Angus, The Great Escape: Health, wealth and the origins of » Latvia eased conditions for child- inequality, Princeton University Press, Princeton, 2013; Wilkinson, R. and K. Pickett, The Spirit Level: Why equality is better for everyone, revised care benefits in 2014, after edition, Penguin, London, 2010; Corak, Miles, ‘Inequality from Generation scaling back the parental leave to Generation: The United States in comparison’, in Robert Rycroft (ed.), benefit in 2010. The Economics of Inequality, Poverty, and Discrimination in the 21st Century, ABC-CLIO, Santa Barbara, CA, 2013.

INNOCENTI REPORT CARD 12 33 SECTION 4 UNEVEN RESPONSES

Table 1 Recent significant changes to family benefits (family/child/birth/child care/tax credits and breaks)

Country Type of Year Benefit Eligibility Details benefit phased level/ in duration Australia Various 2011– +/- - New paid parental leave. More generous family tax benefit supplement for 2014 dependent 16- to 19-year-olds in full-time secondary education. Temporary freeze on indexation of benefit amounts and income thresholds of family tax benefits. Child birth benefits more restrictive and less generous. Austria Family 2011 -- More restrictive to over-18s. Less generous supplement for low-income families with multiple children. Belgium Child 2013 -- More restrictive and less generous to over-18s. Cuts to school bonus supplement. Bulgaria Child 2013– + More generous child allowances and child-care leave benefits. 2014 Canada Parental 2011 + Paid maternity and parental leave extended to the self-employed, subject to leave conditions. Tax 2011 + Two new narrowly targeted non-refundable tax credits. credits Chile Various 2010– + + Higher family allowance and maternity benefit (including a new bonus 2013 payment from March 2014). More generous cash-transfer programme for families in extreme poverty. Croatia Tax break 2012 + Income tax allowances for dependent children increased. Cyprus Family 2011– +/- - More restrictive and less generous child benefit and student grant; new 2012 lone-parent supplement. Czech Family 2011– - Social allowance abolished, but care allowance for disabled children Republic 2012 increased; birth grant more restrictive. Denmark Family 2012 + + Abolished ceiling on number of children eligible. Increased allowances for disabled children. 2014 + _ Income ceiling introduced. New benefit supplement for parents in vocational training. Estonia Family 2013 + More generous child benefit. New supplementary benefit for low-income families. Finland Family 2013 - Freeze on indexation of child benefit amounts until 2015. Child care 2014 + Increased amounts of basic rates of maternity/paternity/parental leave benefits; child home care, private day care and partial care allowances. France Family 2014 -/+ - Reduction in the basic child allowance for under-3s (in families above a certain income level); baby bonus eligibility more restrictive; gradual increase in supplement for large families and lone-parent families. Tax break 2014 - Child tax allowances reduced. ‘Family quotient ceiling’ reduced. Germany Family 2010 + More generous child benefit and child tax benefit. More generous means- tested child allowance (from 2014). Parental 2011 -- Stricter eligibility and lower earnings-replacement rate. leave Greece Family 2013 + + New means-tested single child benefit introduced. Hungary Family 2011 - Family allowance more restrictive with respect to child age. Tax break 2011– + + Family tax allowances more generous and less restrictive (alongside the 2014 introduction of a flat rate income tax). From 2014, family tax allowances can be deducted from social security contributions. Iceland Family 2013 + Child benefit amounts increased. Ireland Family 2010– - + Successive cuts to child benefit amounts; new means-tested benefits for 2013 low income families introduced. Tax 2011 - Tax credits for lone-parent families decreased. credits Israel Family 2013 -- Benefit cuts; income ceiling introduced. Italy Family 2014 + Cash transfers to low-income families extended to migrants (both EU and non-EU citizens). Child care 2013 + Child-care voucher for mothers not using parental leave. Japan Family 2010 + +/- Child allowance extended to children under 15, income test abolished (but re-introduced in 2012) and benefit amounts increased. Child rearing allowance extended to lone fathers. Tax 2011 - Tax breaks for dependent children abolished. breaks Latvia Child care 2014 + + More generous and less restrictive. Formerly for uninsured persons only. Child care 2013 + New child-care cost subsidy for pre-school children. Parental 2010 - Income ceiling introduced. Restrictions on work (to be reversed in late 2014).

34 INNOCENTI REPORT CARD 12 SECTION 4 UNEVEN RESPONSES

Country Type of Year Benefit Eligibility Details benefit phased level/ in duration Lithuania Family 2010 - Eligibility criteria more restrictive. Tax 2014 + Tax allowance increased for first child. breaks Luxembourg Parental 2013 + Increased duration of unpaid parental leave. leave Malta Child 2011 + Increase in child allowance minimum rate. Tax 2011– + Temporary exemption from income tax for women with children who return breaks 2012 to work after a five-year absence. New tax regime for parents introduced. Parental 2012– + Paid maternity leave extended by four weeks. leave 2013 Child care 2014 + Free child care for parents in education or employment. Netherlands Family 2011– +/- - Child allowance for second and subsequent children increased (reduced in 2013 2012, increased in 2013). Income ceiling lowered. Reform planned for 2015. Child care 2012 -- Child-care allowance lowered and eligibility restricted. New Zealand Tax 2012 + - Higher rate, but lower income ceiling. credits Norway Child care 2012 + - ‘Cash for care’ benefit abolished for 2-year-olds, but made more generous for children aged 13 to 18 months. Poland Family 2012 + + Benefit amounts and income ceilings increased. 2013 - Income testing of birth grant introduced. Tax 2013 + - Tax allowances for families with more than two children increased; income breaks test introduced for families with one child. Parental 2013 + Paid parental leave implemented. leave Portugal Child 2011 - Income ceiling lowered. Tax 2013 + Tax allowances for children increased. breaks Republic of Child care 2013 + Child-care subsidy extended and no longer income tested. Korea Tax 2013 + Tax breaks for lone-parent families introduced. breaks Parental 2011 + More generous parental leave benefit (40% of earnings, up to a ceiling), with leave the minimum equal to the former flat rate. Romania Family 2011 -- Less generous for families with one child. More restrictive income testing. Slovakia Parental 2011 + Unified parental leave benefit introduced (indexed regularly), allowing parents leave to work without loss of benefit. Length of maternity leave extended and replacement rate increased from 60% to 65%. Slovenia Family 2012 -- Less generous and more restrictive (until GDP growth exceeds 2.5%). Spain Family 2010 -- Birth grant abolished. Means-tested child benefit amount cut for under-3s. Sweden Family 2010 + Benefit amounts increased. Turkey Other 2012 + General health insurance introduced (free healthcare for all children). United Child 2010 - No indexation of benefit amounts for three years. ‘Health in pregnancy’ grant Kingdom abolished. 2013 - Income ceiling introduced. Tax 2009– -- Income ceiling lowered. Changes in indexation of benefit amounts. Work credits 2012 requirement for couples with children increased. Child care 2011 - Child-care element of tax credits reduced. 2013 + 15 hours a week of free child care extended to 2-year-olds. Other 2013 - Spare room subsidy abolished. Benefit cap introduced. United States Tax 2010– + ‘Additional Child Tax Credit’ extended until 2017. It was due to expire in 2010, credits 2012 then in 2012. Other 2009– + Supplemental Nutrition Assistance Program (SNAP) increased benefit 2013 amounts until 2013.

Source: OECD Benefits and Wages, country-specific information; OECD, Society at a Glance 2014, Table 1.2; ’Investing in Children: Breaking the cycle of disadvantage‘, analysis by the European Network of Independent Experts on Social Inclusion; Europe 2020 National Reform Programme reports; UNICEF National Committees. Note: A minus sign (-) means less generous: lower benefit levels (through cuts or changes to indexation rules) or duration of benefit receipt; stricter eligibility conditions or cancellation of a programme. A plus sign (+) means the opposite.

INNOCENTI REPORT CARD 12 35 SECTION 4 UNEVEN RESPONSES

» Poland introduced modest but Figure 21 GDP and total expenditure positive reforms in family 160 transfers, tax breaks and parental leave in 2012–2013. 150 140 » Malta implemented a comprehensive universal child- 130 care plan in 2014. 120 110 » Greece made a disparate system

of child-related allowances into a Index (1995 = 100) 100 less restrictive, more generous 90 single benefit in 2013. 80 In several countries, family-related 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 benefits were reduced. In Ireland Total expenditure index GDP index and Spain, action was limited by demands for financial adjustment Source: Eurostat. measures, leaving children behind precisely when their poverty indicators began to soar. Romania Figure 22 Evolution of Gini coefficient in 16 OECD countries since the and the United Kingdom performed mid-1980s better in terms of child poverty, but 0.32 decisions made, or avoided, in later years may affect this: 0.31 » In Spain, unemployment benefits have been tightened, child-care benefits reduced and universal 0.30 birth benefits eliminated. The Gini index share of the social protection budget spent on families and 0.29 children declined from 5 per cent to 3.5 per cent between 2008 and 2011. 0.28 mid-1980s around 1990 mid-1990s around 2000 mid-2000s 2010 » Ireland cut child benefits several Source: OECD income distribution database. times from 2010 to 2014, while squeezing unemployment benefits and social assistance. On a positive note, tax reform in and tax credits for families with » Romania reformed its family 2011 reduced deductions for lone children. In 2013, a cap was support system in 2011, parents and disabled children, imposed on the total benefits a replacing two means-tested and in 2014 initiatives were household can receive, mainly family allowances with a announced to improve health affecting a small number of large single benefit, and adding coverage for children under six families with high housing costs, extra provision for lone and to reinforce school breakfast while housing benefits were cut parents. The new benefit, programmes. (the so-called ‘bedroom tax’), however, is less generous to » Since 2010, the United Kingdom affecting large numbers of social families with one child and has implemented a series of cuts tenants. One positive note: child- more generous to families that have reduced the real value care provisions for two-year-olds with three or more, and it has and coverage of child benefits have been expanded. a lower income ceiling.

36 INNOCENTI REPORT CARD 12 SECTION 4 UNEVEN RESPONSES

Summary Italy, 444,000 in France and 2 million as were pleas from other vulnerable in Mexico.24 sectors. Compromises were Millions more children could have undoubtedly necessary. But, as we been helped if protection policies All countries faced difficult choices, have seen, some policies, and the had been stronger before, and had limited budgets and worsening manner in which they were been strengthened during, the recessions, and the enormity of implemented, were more effective Great Recession. The recession has the challenges should not be than others. brought suffering and life-long risks underestimated. Demand for upon an extra 619,000 children in austerity measures was intense,

Box 6 Children of the United States’ recession

The Great Recession was preceded by a period of introduced the Making Work Pay tax credit (a refund low interest rates internationally, and was triggered of up to $400 for working individuals and up to $800 by the 2007 sub-prime mortgage crisis in the United for married taxpayers filing joint returns). The social States. The low interest rates, combined with a trend protection components of the stimulus package cost in the United States toward lower lending standards an estimated $200 billion. and aggressive marketing of higher-risk, sub-prime mortgage products, inflated real estate prices. In Child poverty in the US, state by state 2007, the bubble burst, asset values plunged and Between 2006 and 2011, child poverty increased in mortgage defaults and foreclosures surged. 34 states. The largest increases were found in Collapsing housing prices and the ensuing losses by Nevada, Idaho, Hawaii and New Mexico, all of which large financial firms holding securities tied to real have relatively small numbers of children. Meanwhile estate values triggered the largest, synchronous Mississippi and North Dakota saw notable global economic decline since the Second World decreases. In several large states, smaller War. To counter rising unemployment and a falling percentage increases mask substantial increases in GDP, in 2009 the American government passed the the absolute number of children who slid into Recovery and Reinvestment Act, an $800 billion poverty: California (221,000), Florida (183,000), stimulus package to stabilize the economy and Georgia (140,000) and Illinois (133,000). In the United increase protection for vulnerable groups. The act States overall, 24.2 million children were living in expanded food stamp programmes, extended poverty in 2012, a net increase of 1.7 million from unemployment benefits from 26 to 99 weeks, 2008. Indeed, of all newly poor children in the OECD improved the Earned Income Tax Credit (EITC), and and/or EU, about a third are in the United States.

INNOCENTI REPORT CARD 12 37 SECTION 4 UNEVEN RESPONSES

League Table 4 Child poverty in the United States by state (and the District of Columbia)

Change Rank US State (2007–2012) 24.8 1 North Dakota -5.4 North Dakota 19.5 43.4 2 Mississippi -4.3 Mississippi 39.1 36.3 3 West Virginia -4.2 West Virginia 32.2 21.1 4 Wyoming -2.9 Wyoming 18.2 24.0 4 Virginia -2.9 Virginia 21.2 31.6 6 Missouri -2.1 Missouri 29.5 23.8 6 Massachusetts -2.1 Massachusetts 21.6 23.6 8 Iowa -1.6 Iowa 22.0 26.1 9 Utah -1.2 Utah 24.9 25.0 10 Wisconsin -1.1 Wisconsin 23.9 34.8 11 Tennessee -0.9 Tennessee 33.8 27.0 12 Pennsylvania -0.4 Pennsylvania 26.6 24.2 13 Nebraska -0.3 Nebraska 23.9 19.0 14 Connecticut -0.2 Connecticut 18.7 41.0 15 DC (District of Columbia) -0.1 DC (District of Columbia) 40.9 36.3 15 Oklahoma -0.1 Oklahoma 36.2 19.3 17 Minnesota 0.0 Minnesota 19.3 36.8 18 Texas 0.2 Texas 37.1 39.4 19 Arkansas 0.6 Arkansas 40.0 11.4 20 New Hampshire 1.1 New Hampshire 12.5 36.7 21 Kentucky 1.3 Kentucky 38.0 21.3 21 New Jersey 1.3 New Jersey 22.6 24.1 23 South Dakota 1.4 South Dakota 25.4 18.5 23 Maryland 1.4 Maryland 20.0 29.0 25 Ohio 1.6 Ohio 30.6 22.7 26 Colorado 1.7 Colorado 24.4 38.6 27 Louisiana 2.1 Louisiana 40.7 24.0 28 Rhode Island 2.2 Rhode Island 26.2 21.2 28 Maine 2.2 Maine 23.3 27.0 30 Michigan 2.5 Michigan 29.6 33.2 31 California 2.7 California 36.0 31.2 32 New York 3.1 New York 34.3 34.2 33 North Carolina 3.6 North Carolina 37.9 35.6 34 Arizona 3.7 Arizona 39.4 28.8 35 Kansas 3.9 Kansas 32.7 30.3 36 Oregon 4.1 Oregon 34.5 16.8 37 Vermont 4.2 Vermont 21.0 31.5 38 South Carolina 4.3 South Carolina 35.8 32.7 39 Georgia 4.5 Georgia 37.2 28.1 40 Florida 4.6 Florida 32.7 31.7 41 Alabama 4.7 Alabama 36.5 26.9 42 Illinois 5.1 Illinois 32.0 27.8 43 Indiana 5.7 Indiana 33.5 19.7 44 Washington 5.8 Washington 25.5 17.4 45 Alaska 5.9 Alaska 23.3 24.6 46 Delaware 6.7 Delaware 31.3 25.6 47 Montana 7.7 Montana 33.3 22.6 48 Hawaii 8.0 Hawaii 30.6 32.8 49 New Mexico 9.1 New Mexico 41.9 25.1 50 Nevada 9.5 Nevada 34.6 26.5 51 Idaho 10.0 Idaho 36.5

Source: CPS Annual Social and Economic Supplement. 0 10 20 30 40 50 Notes: Poverty estimates were computed using Child poverty rate (%) three-year averages (2005-2006-2007 and 2010-2011-2012). Figures are rounded to the first decimal. 2006 2011

38 INNOCENTI REPORT CARD 12 SECTION 4 UNEVEN RESPONSES

Box 7 Social safety, American-style

In the United States in recent decades, the social peaked.i i Panel A looks at the families whose income safety net has favoured the working poor more than falls below the poverty threshold; panel B looks at the out-of-work poor. When the federal welfare the ‘extreme poor’, whose family income falls below programme was reformed in 1996, a workforce 50 per cent of the poverty threshold. Several sources development component was added and a key of income are compared: employment earnings, programme for the very poorest families was unemployment insurance, food stamps, the EITC rewritten: Temporary Aid for Needy Families (TANF) and the TANF/AFDC programmes. replaced Aid to Families with Dependent Children Among those at or below 100 per cent of the poverty (AFDC), in place since 1935. TANF has declined threshold, a large decrease in earned income and significantly since 1996. With a budget of $10 billion TANF in 2010 is offset by large increases in food in 2010, at the lowest point of the recession, it stamps and the EITC. There was also a modest reached just 2 million families, compared to more increase in unemployment insurance. For this group than 5 million in 1994 (with a $30 billion budget). as a whole, the increase in child poverty was lower Meanwhile, unemployment insurance paid $139 billion during this recession than it was in 1982. in benefits in 2010. Half of that was from the extra For those at or below 50 per cent of the poverty benefits that were part of the stimulus package, threshold – the extreme poor – the story is including increased benefit amounts and extended somewhat different. Panel B still shows a large coverage periods. decrease in earned income and TANF and a large For poor families with children, the most important increase in food stamps, but it also shows a much part of the safety net is the Supplemental Nutrition smaller increase in the EITC and a slight decline in Assistance Program (SNAP), formerly called the Food unemployment insurance, in contrast with the Stamp Program. The stimulus package added situation of the regular poor. $40 billion in new funding to this, allowing for an This highlights how the United States safety net has increase in the monthly benefit. As a result, almost changed to provide more support for poor working one person in seven in the country received the families and less for the extreme poor with no work. benefit, and the budget reached $70 billion in 2011. As a result, extreme child poverty has also increased How did the safety net perform? more in this recession than in the recession of 1982, indicating that the safety net was stronger for the In counting the poor, the United States Census Bureau poorest children 30 years ago. (USCB) uses annual income data to define the poverty line, or the ‘poverty threshold’, as it is called. In 2013, for example, the USCB poverty threshold for a three- i Source: https://www.census.gov/hhes/www/poverty/ person family unit was estimated at $18,552.i data/threshld/ Figure 23 compares income composition in 2010 and ii The composition of income is after taxes and transfers 1982, when the last major United States recession (ATTI).

Figure 23 Composition of after-tax and transfer income by source – below 50 and below 100 per cent poverty

Panel A: below 100 per cent poverty Panel B: below 50 per cent poverty 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 Percentage of ATTI Percentage 0 of ATTI Percentage 0 WC WC EITC EITC Food Food TANF TANF AFDC/ AFDC/ Earned Earned UI/VET/ UI/VET/ stamps stamps income income 1982 2010 1982 2010

Source: Bitler, M., H. Hoynes and E. Kuka, ‘Child Poverty and the Great Recession’, Innocenti Working Paper, UNICEF Office of Research, Florence, 2014. Note: UI/VET/WC: Unemployment Insurance (UI), Veterans (VET), Workers Compensation (WC).

INNOCENTI REPORT CARD 12 39 SECTION 5 CONCLUSION

Economist John Kenneth Galbraith Figure 24 The Great Leap Backward: years of progress lost for families famously coined the term with children “conventional wisdom” to describe general statements that most Greece 14 people accept as true, even if they are not. In the case of the Great Ireland 10 Recession and its impact on children, conventional wisdom has it Spain 10 that the suffering was inevitable, spread equally among social groups Luxembourg 10 and alleviated by the macroeconomic recovery. Iceland 9

This report suggests otherwise. Italy 8 Children by the millions were immediately and directly affected Hungary 8 by the recession (more than other vulnerable groups, such as the Portugal 8 elderly), and many will suffer the consequences for life. And the Belgium 6 impact certainly has not been spread evenly across all children Latvia 6 in all countries. United Kingdom 6 Figure 24 charts decreases in household income from 2008 to Lithuania 5 2012.25 It shows that years of potential progress have been lost in Bulgaria 4 the recession. In Greece, families with children lost the equivalent of Estonia 4 14 years of income progress. Ireland, Luxembourg and Spain lost Malta 4 10 years; Iceland lost 9, and Italy, Hungary and Portugal lost 8. The Netherlands 4 situation is probably worse for Romania 4 children in families at the lowest income levels. Slovenia 4 The larger cost of this lost potential may be seen in increased social 0 2 4 6 8 10 12 14 16 alienation and reduced population growth. Upward trends in fertility Years lost Source: Eurostat. rates have slowed for the first time Note: Estimates based on median equivalized incomes for households with children in national currency at in a decade, a phenomenon at least 2007 prices.

40 INNOCENTI REPORT CARD 12 SECTION 5 CONCLUSION

partially linked to young adults before many households get back – States should consider drawing delaying family formation due to to pre-recession levels of well-being. ‘red lines’ – indicators of child economic conditions. Those worst High unemployment and fiscal poverty and well-being – that, if affected are countries that were restraint will remain the norm for the crossed, automatically trigger most exposed to the recession and foreseeable future in many public intervention. young age groups (15–19 and countries. Governments and » Rescue, prevent and give hope. 20–24). Such impacts magnify the institutions must consider how to Opportunities to break cycles of disadvantages of persistent poverty ensure that the “superior interest” child vulnerability should be and reduce educational and of children is guaranteed.27 promoted. Certain guaranteed professional achievement potential. The analysis in this report suggests minimum social standards would Failure to respond boldly may have the following principles and make a positive difference. long-term negative implications for recommendations for governments societies. – Rescue: poverty and deprivation to consider in strengthening child are at emergency levels in half a These risks are most evident in protection strategies: Europe, where the plight of children dozen countries and are » Make an explicit commitment to reflects rising inequality in and intolerably high in many others. end child poverty in developed among states. An increasing Governments should invest to countries. At a time when the inequality gap threatens the eliminate extreme poverty by: end of child poverty plays a European Union’s ambitious central role in the post-2015 · implementing the convergence projects, such as the development agenda, affluent recommendations of the Europe 2020 strategy to “lift at least countries should lead the way by European Commission report 20 million people out of poverty and placing the well-being of children ’Investing in Children: Breaking social exclusion and increase 28 at the top of their responses to the cycle of disadvantage‘, employment … to 75%”.26 the recession, for ethical reasons which include a call for integrated Government responses to the and for their own self-interest. strategies, the development of recession have varied widely. In universal policies and the – Child poverty and social exclusion some countries, and in very different involvement of stakeholders; should be addressed from a child contexts, public institutions and rights perspective, in accordance · guaranteeing an appropriate programmes have been effective at with the commitments made in balance between universal and protecting children. An array of legal the Convention on the Rights of targeted policies aimed at and economic measures – from tax the Child. supporting the most reforms to protecting families from disadvantaged children; and eviction – was taken to contain child – Comprehensive assessments poverty and safeguard the should be undertaken of the · improving the education fundamental rights of children. recession’s impact on children. system’s impact on equal Since 2008, effective public The current and future well-being opportunities and strengthening interventions have saved 4 million of children should be part of a the responsiveness of the health children from poverty in 18 national conversation, oriented system to the most countries mildly exposed to the toward specific outcomes. disadvantaged. recession. – The leave-no-one-behind principle – Prevent: increasing investment in The effectiveness of these should form the foundation of social protection policies and responses may be debated for future social strategies in programmes can reduce poverty, decades to come, but one certainty developed countries. Equity enhance social resilience in is that economic indicators alone do should be at the centre of any children and support economic not reveal the complexity of social national plan for children and development in an efficient, cost- reality. Six years into the recession, adolescents, including education, effective way. Such measures the impact on children and families housing, special needs and other include guaranteeing basic is still unfolding. It may be years key areas. incomes for families, helping

INNOCENTI REPORT CARD 12 41 SECTION 5 CONCLUSION

parents integrate into economic » Produce better data for informed markets and protecting vulnerable public debate: availability, children from financial and social timeliness and usefulness of exclusion. A child rights impact information about the well-being assessment is a useful strategy of children should be improved. for decision-making in the best – All countries should deepen data interests of children. collection, the better to measure There needs to be a preventive poverty levels, age groups, NEET focus on children who face rates and other factors. increased risk due to multiple – New data should be released disadvantage, such as those in promptly to help with timely migrant and lone-parent families. decision-making. And there needs to be access to affordable early childhood – Access should be improved to education and care to facilitate information for non-profit, public- parents’ labour market interest research institutions. participation, and also to reduce Fifty years from now, we will look inequalities at young age. back at this period as a critical – Give hope: adolescents and juncture in the history of many young adults must be part of any affluent countries. The Great economic agenda to recover from Recession may be remembered for the recession. Governments the generation of vulnerable children should draw up specific plans to it left behind. But it may also be address youth unemployment and remembered as a transcendent high NEET levels by smoothing historical moment, when recovering the transition from education to nations laid the foundations for employment, reducing more inclusive societies based on underemployment, and equality and opportunity for all. How strengthening occupational else will we repay the debt we owe adjustment strategies. to the children of the recession?

42 INNOCENTI REPORT CARD 12 INTERNATIONAL ABBREVIATIONS

International abbreviations (ISO) for countries covered in the Report Card

AT Austria AU Australia BE Belgium BG Bulgaria CA Canada CH Switzerland CL Chile CY Cyprus CZ Czech Republic DE Germany DK Denmark EE Estonia ES Spain FI Finland FR France GR Greece HR Croatia HU Hungary IE Ireland IL Israel IS Iceland IT Italy JP Japan KR Republic of Korea LT Lithuania LU Luxembourg LV Latvia MT Malta MX Mexico NL Netherlands NO Norway NZ New Zealand PL Poland PT Portugal RO Romania SE Sweden SI Slovenia SK Slovakia TR Turkey UK United Kingdom US United States

INNOCENTI REPORT CARD 12 43 DATA SOURCES – THE LEAGUE TABLES

League Table 1 » Mexico: Encuesta Nacional de Ingresos OECD, Society at a Glance 2014: y Gastos de los Hogares (ENIGH) 2006 Data refer to children aged 0 to 17. » Australia: March 2007 and March 2013; and 2012; For the majority of countries covered, » Canada, Mexico, New Zealand and the » New Zealand: Household Economic surveys detailing household conditions United States: Q1-2007 and Q1-2013; Survey 2006/2007 and 2011/2012 are published annually (the latest available (estimates taken from B. Perry, » Japan: Q4-2007 and Q4-2012. is 2012) and they typically refer to income Household Incomes in New Zealand: levels of the previous year (2011). OECD, Education at a Glance 2013 (2008 Trends in indicators of inequality and and 2011): Israel, Republic of Korea. For Canada, Chile, Israel, Mexico, New hardship, 1982 to 2013, New Zealand Zealand and the Republic of Korea, period Ministry of Social Development, CASEN 2006 and 2011: Chile. differs from 2008 to 2012 (see sources Auckland, 2014); below). » Republic of Korea: Household and League Table 3 Data for Turkey refer to children Income Expenditure Survey 2007–2011 Gallup collects and makes available aged 0–19. and Farm Household Economy Survey information on a number of self-reported 2007–2011; The 2008 and 2012 (anchored) child indicators in some 160 countries. A poverty rates for Croatia are not directly » Turkey: Income and Living Conditions representative sample of 1,000 adults (age comparable. The estimate for 2008 was Survey 2008 and 2012; 15+) is contacted by phone in developed obtained from Eurostat. The anchored countries with 80 per cent phone » United States: Current Population child poverty rate for 2012 was computed coverage. Gallup data are increasingly Survey (CPS) 2008 and 2012. with micro-data from the 2012 European used by multilateral agencies, but there Union Statistics on Income and Living The income reference year is the calendar are concerns about their statistical Conditions (EU-SILC) using the 2008 or tax year previous to the survey year, reliability and a scarcity of disaggregated poverty line obtained from the Household with the exceptions of: Chile, Mexico, data on children. Gallup data are available Budget Survey (HBS) 2008, and uprated Republic of Korea and the United Kingdom, for 2006–2013 via a paid subscription to for inflation. where the survey and income reference Gallup Analytics. See: http://www.gallup. years coincide; Australia, where the com/gallupanalytics.aspx Sources: The calculations for League income reference year goes from July of Table 1 are based on the latest Eurostat Where no data for 2007 were available, the previous year to June of the survey estimates for 2008 and 2012 (estimates the 2008 data were used; if the 2008 data year; Croatia and Ireland (HBS 2008), from EU-SILC; break in time series for were not available, the 2006 data were where the income reference period is a 2012 data for Austria and the United used. In general, 2008 data were used moving 12-month period preceding the Kingdom). for Austria, Finland, Iceland, Ireland, interview. Income reference years for Luxembourg, Malta, Norway and For the remaining countries: New Zealand are 2006 and 2011. For Israel, Portugal; 2006 data were used for income is monthly, with the reference » Australia: HILDA 2008 and 2012 Bulgaria, Croatia, Cyprus, Slovakia, period of the last three months before (Household, Income and Labour Slovenia and Switzerland. the interview. Dynamics in Australia survey); For the stress indicator: no data are » Canada: Survey of Labour and Income available for Bulgaria and Croatia; 2006 League Table 2 Dynamics (from Luxembourg Income data were used for Cyprus, the Czech Study) 2008 and 2011; Data refer to children and young people Republic, Greece, Romania, Slovakia, aged 15 to 24. Slovenia and Switzerland; 2007 data » Chile: CASEN 2006 and 2011; were used for Chile and Mexico. Data Quarterly and annual estimates are not » Israel: Household Expenditure Survey for the remaining countries refer to 2008; directly comparable. (from Luxembourg Income Study) 2007 2012 data were used for Norway and and 2010; Sources: Latest Eurostat estimates for Switzerland, as data for 2013 were 2008 and 2013 (estimates from the not available. » Japan: Ministry of Health, Labour and European Union Labour Force Survey). Welfare’s Comprehensive Survey of n.a.: not available. Living Conditions 2008 and 2012;

44 INNOCENTI REPORT CARD 12 DATA SOURCES – THE BACKGROUND PAPERS

The original research for this report, Kokkevi, A., M. Stavrou, E. Kanavou and including further methodological A. Fotiou. ‘The Repercussions of the explanations, can be found in the Economic Recession in Greece on Innocenti Working Papers detailed below Adolescents and their Families’, Innocenti and available at www.unicef-irc.org: Working Paper No. 2014-07, UNICEF Office of Research, Florence, 2014. Bitler, M., H. Hoynes and E. Kuka, http://www.unicef-irc.org/publications/732 ‘Child Poverty and the Great Recession’, Innocenti Working Paper 2014-11, Martorano, B., ‘The Australian Household UNICEF Office of Research, Florence. Stimulus Package: Lessons from the http://www.unicef-irc.org/publications/724 recent economic crisis’, Innocenti Working Paper No. 2013-09, UNICEF Office of Chzhen, Y., ‘Child Poverty and Material Research, Florence, 2013. Deprivation in the European Union during http://www.unicef-irc.org/publications/697 the Great Recession’, Innocenti Working Paper No. 2014-06, UNICEF Office of Martorano, B., ‘Is it Possible to Adjust Research, Florence, 2014. “With a Human Face”? Differences in http://www.unicef-irc.org/publications/723 Fiscal Consolidation Strategies between Hungary and Iceland’, Innocenti Working Chzhen, Y. , ‘Subjective Impact of the Paper No. 2014-03, UNICEF Office of Economic Crisis on Households with Research, Florence, 2014. Children in 17 European Countries’, http://www.unicef-irc.org/publications/719 Innocenti Working Paper No. 2014-09, UNICEF Office of Research, Florence. Martorano, B., ‘The Consequences of the http://www.unicef-irc.org/publications/725 Recent Economic Crisis and Government Reactions for Children’, Innocenti Working Chzhen, Y. and D. Richardson, ‘Young Paper No. 2014-05, UNICEF Office of People (not) in the Labour Market in Rich Research, Florence, 2014. Countries during the Great Recession’, http://www.unicef-irc.org/publications/722 Innocenti Working Paper 2014-12, UNICEF Office of Research, Florence. Martorano, B., ‘Pre-crisis Conditions and http://www.unicef-irc.org/publications/726 Government Policy Responses: Chile and Mexico during the Great Recession’, Chzhen, Y., S. Hämäläinen and J. Vargas, Innocenti Working Paper 2014-15, UNICEF ‘Significant Changes to Family-related Office of Research, Florence. Benefits in Rich Countries during the http://www.unicef-irc.org/publications/729 Great Recession’, Innocenti Working Paper 2014-13, UNICEF Office of Research, Natali, L., B. Martorano, S. Handa, G. Florence. Holmqvist and Y. Chzhen, ‘Trends in Child http://www.unicef-irc.org/publications/727 Well-being in EU Countries during the Great Recession: A cross-country Holmqvist, G. and L. Natali, ‘Exploring the comparative perspective’, Innocenti Late Impact of the Great Recession Crisis Working Paper 2014-10, UNICEF Office of Using Gallup World Poll Data: A note’, Research, Florence. Innocenti Working Paper 2014-14, UNICEF http://www.unicef-irc.org/publications/730 Office of Research, Florence, 2014. http://www.unicef-irc.org/publications/728

INNOCENTI REPORT CARD 12 45 REFERENCES

1. EU-28 plus Iceland, Norway, Switzerland 13. At the end of 2011, when the worst 19. Migrant households are defined as and Turkey. Natali et al. ‘Trends in Child effects of the recession were still to be those with at least one adult born outside Welfare’ details cases where these data are seen, a European report warned about the the European Union. not complete. effects of the crisis on the shocking levels 20. Center for Economic and Social of homelessness among children: “The 2. This figure refers to all households, with Rights, ‘European Rights Chief Warns of most alarming tendency is the increase in and without children. Austerity’s “Lost Generation”’, 5 June children becoming homeless which is 2014. http://cesr.org/article.php?id=1608 3. OECD, Society at a Glance 2014: OECD evident in a number of places, either Social Indicators, OECD Publishing, 2014. because their family has been left 21. OECD, Education Indicators in http://dx.doi.org/10.1787/soc_glance- homeless or because of a breakdown of Focus 18. 2014-en family relationships due to the strain 22. OECD, Society at a Glance 2014. resulting from the crisis.” See: European 4. OECD, Society at a Glance 2014, p. 21. Commission, Directorate-General for 23. Sources as given for League Table 1 5. European Union, Social Europe: Many Employment, Social Affairs and Inclusion, on page 44. ways, one objective, Annual Report of the ‘Homelessness during the Crisis’, 24. These figures are calculated on the Social Protection Committee on the social Research Note 8/2011, 2011, p. 12. basis of the absolute children population situation in the European Union, 2014, Interestingly, the Great Recession does numbers behind League Table 1 p. 127. not seem to have had a similar effect in (see page 44). other countries, such as the United States. 6. ibid., p. 78. 25. The figure reports the number of 14. UNICEF, ‘The Children Left Behind: 7. Data on the United States Special years we must go back to observe median A league table of inequality in child Supplemental Nutrition for Women, Infants household income in families with well-being in the world’s rich countries’, and Children (WIC) Program are available children as low as it was in 2012. Innocenti Report Card 9, UNICEF Innocenti at www.fns.usda.gov/pd/wic-program Research Centre, Florence, 2010, p. 29. 26. European Commission, Directorate- 8. United States Department of General for Employment, Social Affairs 15. Caritas Europa, Europe 2020 Shadow Agriculture, ‘Food and Nutrition’. and Inclusion, The Social Dimension of Report, Caritas Europa, Brussels, 2013, www.usda.gov/wps/portal/usda/ the Europe 2020 Strategy: A report of the pp. 26ff. usdahome?navid=food-nutrition Social Protection Committee, European 16. Brooks-Gunna, J., W. Schneider and Commission, 2011. http://bookshop. 9. Canada Foodbanks, ‘Hungercount J. Waldfogel, ‘The Great Recession and europa.eu/en/the-social-dimension-of-the- 2013’. www.foodbankscanada.ca/ the Risk for Child Maltreatment’, Child europe-2020-strategy-pbKEBA11001/ FoodBanks/MediaLibrary/HungerCount/ Abuse and Neglect, vol. 37, no. 10, 2013, HungerCount2013.pdf 27. OECD, Society at a Glance 2014, pp. 721. www.sciencedirect.com/science/ p. 18. 10. CECODHAS Housing Europe, Press article/pii/S0145213413002226. For release, 2013. www.housingeurope.eu/ information on the increase see also: 28. European Commission, ‘Investing in resource-144/about-time-to-stop-a- Corak, M. ‘America’s Children are the Children: Breaking the cycle of european-wave-of-evictions Silent Victims of the Great Recession’, disadvantage’, Commission PBS Newshour, 8 October 2013. Recommendation, 20 February 2013. 11. RealtyTrac, ‘Foreclosure Report’, www.pbs.org/newshour/making-sense/ http://ec.europa.eu/social/BlobServlet?do 2013. www.realtytrac.com/content/ americas-children-are-the-sile/ cId=9762&langId=en foreclosure-market-report/2013-year-end- us-foreclosure-report-7963 17. OECD, Education Indicators in Focus 18, OECD, 2013. 12. European Union, Social Europe: Many ways, one objective, p. 146. 18. UNICEF Innocenti Research Centre, ‘Measuring Child Poverty: New league tables of child poverty in the world’s rich countries’, Innocenti Report Card 10, UNICEF Innocenti Research Centre, Florence, 2012.

46 INNOCENTI REPORT CARD 12 ACKNOWLEDGEMENTS

The Innocenti Report Card 12 project was Kenneth Nelson (Swedish Institute for coordinated by the UNICEF Office of Social Research, Stockholm University) Research – Innocenti, and assisted by a Dominic Richardson (Organisation for panel of advisors and reviewers. Research Economic Co-operation and was completed at the end of June 2014. Development, Social Policy Division) The full text and the backgound papers to Judit Vall Castello (Centre for Research this report can be downloaded from the in Economic Policy and Health, Pompeu UNICEF Office of research website at Fabra University) www.unicef-irc.org. Peter Whiteford (Australian National Research and data analysis University) Yekaterina Chzhen (Social and Economic Policy Specialist, UNICEF Office UNICEF Advisors of Research) Prerna Banati (Senior Planning Specialist, UNICEF Office of Research) Gonzalo Fanjul (Independent consultant) Aurélie Chun (Consultant, Private Sudhanshu Handa (Chief, Social and Fundraising and Partnerships, Economic Policy Unit, UNICEF Office UNICEF Geneva) of Research) Martin Evans (Social Policy Specialist, Goran Holmqvist (Associate Director, Division of Data, Research and Policy, UNICEF Office of Research) UNICEF New York) Bruno Martorano (Consultant, Sandrine Flavier (Communication UNICEF Office of Research) Specialist, Private Fundraising and Luisa Natali (Consultant, UNICEF Office Partnerships, UNICEF Geneva) of Research) Marie-Claude Martin (Director, UNICEF Office of Research) Advisory board Peter Adamson (Independent consultant) Jens Matthes (Senior Policy Specialist, Division of Data, Research and Policy, Marta Arias Robles (Advocacy Director, UNICEF New York) Spanish Committee for UNICEF) Alison Rhodes (Programme Specialist, Jonathan Bradshaw (University of York; Private Fundraising and Partnerships, Durham University) UNICEF Geneva) Chris De Neubourg (Maastricht University; Dale Rutstein (Chief, Communication Unit, Tilburg University) UNICEF Office of Research) Liliana Fernandes (Portuguese Catholic University) Administrative support at the UNICEF Manos Matsaganis (Athens University Office of Research was provided by Cinzia of Economics and Business) Iusco Bruschi and Laura Meucci.

INNOCENTI REPORT CARD 12 47 48 INNOCENTI REPORT CARD 12 Previous issues in this series: Innocenti Report Card 1 A league table of child poverty in rich nations

Innocenti Report Card 2 A league table of child deaths by injury in rich nations

Innocenti Report Card 3 A league table of teenage births in rich nations

Innocenti Report Card 4 A league table of educational disadvantage in rich nations

Innocenti Report Card 5 A league table of child maltreatment deaths in rich nations

Innocenti Report Card 6 Child poverty in rich countries 2005

Innocenti Report Card 7 Child poverty in perspective: An overview of child well-being in rich countries

Innocenti Report Card 8 The child care transition: A league table of early childhood education and care in economically advanced countries

Innocenti Report Card 9 The children left behind: A league table of inequality in child well-being in the world’s rich countries

Innocenti Report Card 10 Measuring child poverty: New league tables of child poverty in the world’s rich countries

Innocenti Report Card 11 Child well-being in rich countries: A comparative overview

Graphics: MCC Design, UK (mccdesign.com) Printed by: ABC Tipografia, Sesto Fiorentino, Florence, Italy Innocenti Report Card 12, 2014 Children of the Recession: The impact of the economic crisis on child well-being in rich countries

UNICEF Office of Research – Innocenti Piazza SS. Annunziata, 12 50122 Florence, Italy Tel: +39 055 20 330 Fax: +39 055 2033 220 fl[email protected] www.unicef-irc.org

ISSN 1605-7317 © The United Nations Children’s Fund (UNICEF) October 2014

ISBN: 978-88-6522-030-6

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